Global debt hits record as investors diversify from US Treasuries
Updated
Updated · Reuters · May 6
Global debt hits record as investors diversify from US Treasuries
11 articles · Updated · Reuters · May 6
The IIF said debt rose more than $4.4 trillion in the first quarter to nearly $353 trillion by end-March, while global debt-to-GDP stayed around 305%.
It said stronger demand for Japanese and euro zone government bonds contrasted with stable Treasury demand, as Washington's borrowing surge and worsening long-term US fiscal outlook influenced allocations.
US corporate bonds still benefited from AI-linked issuance and overseas inflows, while emerging-market debt excluding China reached a record $36.8 trillion and structural spending pressures were seen pushing debt higher.
Is the massive AI debt boom creating the next 'too big to fail' risk for global markets?
Could a retreat of Japanese capital from U.S. bonds be the trigger for the next global credit shock?
As China offers RMB financing, is a new financial world order emerging to challenge the U.S. dollar?
Global Debt Hits $109 Trillion in 2025 Amid $8 Trillion U.S. Refinancing Wall in 2026
Overview
Global debt surged to a record $109 trillion in 2025, driven by sustained government spending and low interest rates that encouraged borrowing. However, central banks have tightened policies to fight inflation, pushing long-term borrowing costs higher and creating a $8 trillion refinancing challenge in 2026. The U.S. Treasury market faces added stress from increased short-term debt and shifting foreign investors, notably China reducing its holdings amid geopolitical tensions and de-dollarization efforts. Despite these pressures, demand for U.S. Treasuries remains strong due to their safe-haven status. Investors, including BlackRock, are adapting by favoring intermediate maturities and diversifying into quality income assets to navigate this fragile fiscal environment.