Advanced economy bond yields have surged since the Middle East conflict, yet emerging market and developing economies have avoided the severe fallout often associated with higher global rates. Dollar-denominated sovereign spreads narrowed, cushioning borrowing costs, while currencies and portfolio flows stabilized. Still, absolute financing costs remain high, especially for weak-credit countries and those with substantial short-term debt. Policymakers should use this window to reduce deficits, contain inflation, lengthen maturities, and secure concessional financing before conditions deteriorate again or volatility returns.