Despite ongoing concerns about inflation triggered by the war, rising real yields in the United States are more critical, indicating that bond market investors' worries are not limited to oil prices. Factors such as expanding public debt, a surge in artificial intelligence investments, and the possibility of continued rate hikes by central banks collectively push up long-term interest rates. Analysts say that short-term declines in long-term yields are unlikely to be fully reversed, and borrowing costs may remain high for years, putting pressure on the government and the economy.

DeepFlowTech

2026-05-24 14:48:01

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Deep Tide TechFlow News, May 24 — Despite widespread concerns about inflation triggered by the war, signs indicate that other factors are also influencing long-term borrowing costs. In the United States, the so-called "real yield," which excludes inflation effects, has a greater impact, suggesting that bond investors are worried about more than just price pressures from the Iran war. Other drivers include: the already massive public debt burden potentially expanding further, the impact of the artificial intelligence investment boom, and the increasing likelihood of central banks like the Federal Reserve raising interest rates rather than cutting them. Strategists at ING, Goldman Sachs, and Barclays all emphasize a common speculation: that the recent rise in some long-term yields, even if inflation recedes due to rising oil prices, will not be fully reversed. This means that even if the conflict ends, market borrowing costs may remain near multi-year highs, continuing to pressure governments and the economy.

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Bond strategist warns: Even if the Iran war ends, yields will remain high

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