Dr. JoAnne Feeney joined BBC to discuss the forces contributing to higher bond yields and the potential implications for inflation and global financial markets. She highlighted renewed hostilities in Iran, increased defense spending outside the U.S., and growing corporate borrowing from major AI companies as factors adding pressure to borrowing demand and interest rates.
Recorded: September 1, 2026
Key Takeaways
- Iran-related risks are adding to inflation concerns: Renewed hostilities could disrupt oil supplies as well as refined products such as diesel, gas, and fertilizer, contributing to higher inflation expectations.
- Government borrowing needs are increasing: Higher defense spending outside the U.S. could place additional pressure on government budgets and lead to greater borrowing requirements.
- AI investment is adding another source of borrowing demand: Significant corporate borrowing by major AI companies is contributing to an unusually high level of financing needs across global markets.
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