BlackRock, the world's largest asset management company, points out that as countries increase defense spending and face heightened political uncertainty, the government debt market is expected to remain highly volatile.

Geopolitical tensions are prompting many countries to expand their military budgets, while election cycles and policy shifts are casting further uncertainty over fiscal prospects. This dual pressure may lead to frequent fluctuations in bond yields, and investors should remain cautious regarding sovereign bond valuations. Although some developed countries are attempting to stabilize markets through fiscal discipline, structural deficits and debt sustainability remain long-term concerns. Emerging markets are particularly vulnerable to the sudden reversal of capital flows, and exchange rate volatility may further amplify debt repayment pressures. In the current environment, asset-liability management strategies require greater flexibility. Institutional investors should consider diversified allocations and dynamic hedging to address potential interest rate risks.