G7 Debt Costs Soar by $16bn as US-Iran War Drives Bond Yields Higher
Rising bond yields since the start of the US-Iran war in February have added $16 billion to G7 sovereign debt costs, with the US accounting for $10.6 billion of that increase. If current yield levels persist through the first quarter of 2027, additional financing costs could reach $34 billion. The surge is driven by inflation fears linked to the closure of the Strait of Hormuz and concerns over growing public debt burdens, particularly in the US, where the 10-year Treasury yield has risen sharply despite Treasury Secretary Scott Bessent’s efforts to suppress rates through bond purchases.