Government bond yields are tearing through everything right now. Homeowners, stock traders, governments; no one’s getting out of this 0 started as a slow change in borrowing costs has now turned into what analysts at Deutsche Bank are calling a “slow-moving vicious circle.” They’re not wrong. Governments, from the 1 the U. K., France, and Japan, are all struggling with rising interest payments on massive 2 investors start doubting whether these countries can handle their debt, they demand more compensation to 3 pushes bond yields even higher, which makes those debts 4 and 5 spike and home loans feel the hit By midweek, the 30-year 6 jumped past 5%, the highest since 7 Japan, their 30-year bond hit a new 8 U.
K.’s 30-year spiked to its highest level in 27 9 though yields eased slightly on Thursday and Friday, they’re still way above pre-2020 10 bigger issue? These high borrowing costs are sticking around. “Cooler heads will prevail, and markets will function as they should,” said Jonathan Mondillo, global head of fixed income at 11 let’s not pretend this volatility is 12 move in the opposite direction of bond prices, and this kind of price action means markets are 13 14 rates are feeling the 15 30-year Treasury yield directly impacts the 30-year mortgage, still the most popular home loan in the 16 that yield spikes, monthly payments go up fast.
“That’s concerning,” said W1M Fund Manager James 17 pointed to rising long-term yields and said, flat out, “this is not going to help mortgage holders.” Yes, Trump’s pressure might lead to short-term rate cuts, and weaker job data already has Fed officials preparing for 18 called that “counterintuitive” and warned it could 19 Carter said the long end of the bond curve is reacting badly: “The long end of the curve is just going to panic… this is not what the White House typically does… those yields are likely if anything to keep moving higher.” Stocks slip, corporates tighten, and investors get nervous As we mentioned, higher government bond yields are punching stocks in the gut too.
Normally, when markets get shaky, investors run to 20 that safe-haven status is 21 year, White House decisions on tariffs and erratic policymaking have made bonds part of the problem, not the 22 Marshall, senior investment analyst at Hargreaves Lansdown, said rising yields pressure stock valuations. “As yields climb, reflecting higher yields from typically safer assets like bonds and cash and increasing the cost of capital, stock valuations tend to come under pressure,” she 23 yeah, we’ve seen it: both 24 25 dropped 26 it’s 27 pointed out that the correlation isn’t always perfect. Sometimes, stocks and bond yields rise 28 on what’s driving 29 in today’s environment, with inflation still high and rate policy still unpredictable, this dance between stocks and bonds is just adding more confusion.
There’s one corner of the market that’s found a strange upside: corporate 30 Hjort, head of credit and equity derivatives at BNP Paribas, said high yields help the corporate bond space in some ways. “It attracts demand… it reduces supply… it incentivizes corporates to be pretty disciplined about their balance sheets,” he said. Basically, borrowing gets more expensive, so companies think twice before adding more 31 Pickering, chief economist at Peel Hunt, said, “Just because we don’t have a crisis in the bond market doesn’t mean these interest rates are not having economic consequences.” According to him, high yields “constrain policy choices,” “crowd out private investment,” and leave markets wondering “every six months whether we’re going to suffer a bout of financial instability.” That’s not exactly a great setup for business 32 even floated the idea that a new round of austerity (yes, government spending cuts) might be what it takes to break the cycle.
“You would give markets confidence, you would bring down these bond yields, and the private sector would just breathe a sigh of relief,” he 33 Bybit now and claim a $50 bonus in minutes
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