Government borrowing costs rise to multi-decade highs as US-Iran peace talks collapse

Government borrowing costs in major economies rose to levels unseen in decades after a ceasefire between the US and Iran ended without agreement on Monday.

By El Medio Oriente
August 19, 2026
A trader is silhouetted against multiple computer monitors displaying colorful stock market charts, financial data tables, and trading information with green and red indicators.
Financial markets react to rising government borrowing costs as peace negotiations between the US and Iran break down. Traders monitor multiple screens displaying real-time market data and stock performance indicators. (The Guardian — World)
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Bond yields in the United States, United Kingdom, Germany, France and Japan climbed on Tuesday as hopes for an end to the US-Iran conflict diminished. The ceasefire between Washington and Tehran ended on Monday night without reaching an agreement.

Concerns about the inflation outlook intensified following the breakdown in talks, with the prospect of reopening the Strait of Hormuz remaining unresolved. Government borrowing costs continued their rise to levels not recorded in decades.

Government borrowing costs rise to multi-decade highs as US-Iran peace talks collapse | El Medio Oriente