Investors urged to brace for volatile rates amid mounting sovereign debt

In a post on the social platform X, Kotak stressed that rising sovereign debt and persistent budget deficits leave central banks with a narrow policy toolkit. The only remaining lever, he said, is to expand balance sheets by creating more money, a step that could elevate inflation and lead to sharper short‑term rate hikes.

He advised market participants to stay agile, as the coming weeks may see rapid swings in yields driven by fiscal pressures in both advanced and emerging economies. The message underscores the interconnected nature of global bond markets where a shift in one major economy can ripple across the world.