The inflation-linked headache echoes the broader challenges arising at the end of more than a decade of global easy money...

,,, in which debtors borrowed vast amounts at very low, and sometimes negative, interest rates. Investors are on alert for financial vulnerabilities after a crisis in U.S. regional banks this year, and with strains emerging in commercial property. 

Borrowing costs of all sorts have risen sharply for governments, businesses and consumers, as central banks have raised key interest rates to combat price pressures. Rates have surged on inflation-linked borrowings, but these aren’t the only source of pain.

As standard bonds with fixed rates mature, they need to be replaced with more expensive new debt. Meanwhile, interest rates on loans are often floating, meaning they quickly reflect changes in policy rates. 

WSJ 25 July 2023

The World Tied $3.5 Trillion-Plus of Debt to Inflation. The Costs Are Now Adding Up. - WSJ