Across their dataset, the CEPR authors calculated that bondholders suffered average real losses of roughly 14% during the first four years of conflicts. “Whenever there is a major war, we observe a sharp decline in the bond performance — wars are always disaster times for bondholders,” they warned. '”AdvertisementA key factor in bond losses is inflation, according to CEPR, which said the cumulative rate averaged about 20% in the first four years of wars. Another reason bonds perform so poorly during wars is so-called financial repression, or government policies that curb borrowing costs by influencing financial markets. “Protecting taxpayers from large spending shocks may require shifting part of the burden onto bondholders through inflation or financial repression,” it said.

Source: Washington Post March 20, 2026 20:29 UTC