Economist Podcasts View to a killing: bond yields rise and rise
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Jan 14, 2025 
In this discussion, Josh Roberts, Capital Markets Correspondent for The Economist, dives into the unexpected surge in government bond yields amid interest rate cuts, exploring how it affects borrowers and the broader economy. Meanwhile, Henry Kerr, the Economics Editor, provocatively weighs in on the U.S. buying Greenland, considering its geopolitical implications and historical contexts. They also touch on the cultural significance of Singapore's hawker centres facing modern challenges, highlighting the intersection of tradition and economic pressures.
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Rising Bond Yields
- Governments in rich countries often spend more than they collect in taxes, leading to bond issuance.
- Bond yields are rising, increasing government debt burdens and affecting other borrowing costs like mortgages.
Bond Yields vs. Interest Rates
- Government bond rates are rising despite central bank interest rate cuts.
- Investor expectations of future rate hikes, influenced by factors like inflation and government policies, drive bond yield increases.
Divergent Expectations
- Expectations diverge from economic data due to inflation concerns and anticipated government policies, particularly those of Donald Trump.
- Trump's policies, such as immigration restrictions and tariffs, could increase inflation and limit central banks' ability to cut rates.