{
  "id": 12038778,
  "title": "Global capital is no longer cheap, that’s the challenge",
  "url": "https://urgent.news/2026/10/05/global-capital-is-no-longer-cheap-thats-the-challenge",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-05T00:30:34.000Z",
  "source": {
    "name": "The Indian Express",
    "slug": "the-indian-express",
    "url": "https://indianexpress.com/article/opinion/editorials/global-bond-yields-ai-spending-10906672/"
  },
  "original_language": "en",
  "account": "Global capital is no longer accessible at low costs, presenting a challenge for governments worldwide. Recent data shows that ten-year US and French government bond yields reached 5.34% and 4.99%, respectively, marking their highest levels since 2002. Japan's yields, crossing 3.1%, were the first since 1996 to surpass this threshold. The rise in borrowing costs for these governments over the past year amounts to 1.2-1.4 percentage points, roughly twice the 0.7 percentage point increase in India's 10-year government security yield. Investors are now demanding higher returns from governments, as these debt instruments are considered inherently risk-free due to the sovereign's power to tax and print currency. Regardless of whether the government is from an advanced or emerging economy, their bonds have surged to multi-decade peaks. Three primary factors contribute to this trend. Firstly, developed country governments maintain persistent deficits, driven by aging populations, expanded social welfare commitments, military build-up, and voter resistance to tax increases or entitlement cuts. The US public debt now exceeds $40 trillion, with the defense budget reaching a record $1 trillion in 2026, while the Trump administration proposes $1.5 trillion for the upcoming fiscal year. The Institute of International Finance estimates that advanced economies paid over $3.3 trillion in interest on globally traded government bonds last year. Secondly, commodity inflation resulting from war and weather-induced supply shocks has led central banks to raise interest rates and signal further increases. Finally, the global race for AI infrastructure development has significantly increased capital expenditure. The four major \"hyperscalers\" - Meta, Microsoft, Amazon, and Google - invested a combined $410 billion in 2025, with projections reaching $725 billion in 2026 and surpassing $1.1 trillion in 2027. This capital funding often comes through debt, forcing governments to compete fiercely for investor money, which in turn raises yields on even seemingly secure long-term US Treasuries. For India, the implications are twofold. Policymakers and corporations must adapt to the reality that global capital is no longer available at cheap costs. Additionally, the importance of fiscal discipline and avoiding private sector crowding out applies equally at home.",
  "summary": null,
  "key_points": [
    "Global capital costs have risen to multi-decade peaks",
    "US and French bond yields hit 5.34% and 4.99% respectively",
    "AI infrastructure development fuels global capital demand"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}