Global debt is at an all-time high, and the buyers of that debt are shifting to players who are more sensitive to interest rates and risks. The OECD tells the story in its Global Debt Report 2026, subtitled “Sustaining Debt Market Resilience Under Growing Pressure” (March 2026). Here are some snapshots to tell the story.
Total government and corporate bond debt is now about $109 trillion. More bonds are being issued. As as share of global GDP, the combination of government and corporate debt issued during a given year peaked during the pandemic at 28%. However, bond issuance has been on a longer-term rise, from 15% of of global GDP back in 2007 to a projected 23% of global GDP this year. The jump in debt for the higher-income countries that are part of OECD is espeically apparent in recent years.
This figure shows the gross borrowingby governments on the horizontal axis, and the “yield” or expected interest rate to be paid on the vertical axis. The green dots show a combination of high borrowing and high yield in recent years.
The share of longer-term bonds being issued is down, which is typically a sign that the risks of issuing such bonds (and the interest rate that would need to be paid for issuing such bonds) appears to be up.
In this report, what especially caught my eye was a shift in the economic players that hold bonds. This figure seemed useful for organizing one’s thoughts on the subject. It shows ththe big categories of bond holders. The left-hand figure compares “duration appetite”–or the preference for long-term bonds–relative to whether the bonds are likely to be held to maturity. For example, life insurers like to purchase long-duration bonds; hedge funds and commercial banks are less likely to hold bonds to maturity. The right-hand figure shows that retail investors, exchange-tradded funds, commercial and investment banks, and hedge funds are the most price-sensitive about purchasing bonds.
The underlying story here is that holders of bonds are shifting. During the pandemic, central banks often bought bonds, as can be seen in the figure below. Central banks are not very price-sensitive, especially when buying bonds from their home country. But more recently, the share of bonds bought by price-sensitive investors like households, money market funds, hedge funds, and others is on the rise. If these investors perceive more risk–say, perhaps as a result of geopolitical tensions–they will want higher returns to compensate. The c
The overall message here is that debt markets are both growing, looking riskier (higher yields and shorter maturities), and increasingly reliant on investors who, unlike central banks, will be highly sensitive to price and risk and not planning to hold bonds to maturity. This doesn’t add up to impending catastrophe, nor anything close, but it’s something to watch. The OECD report notes: “These risks must be carefully managed to ensure that sovereign and corporate bond markets, with a combined size of USD 109 trillion, continue to provide stable financing to governments and corporations. This is especially important as they are set to play an increasing role in funding AI investment and defence spending, at a time when decisions on monetary policy, public debt and pension fund asset allocation are coming under growing pressure.”
