Economist Podcasts
View to a killing: bond yields rise and rise
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.
23:25
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Quick takeaways
- Rising government bond yields are driven by investor fears of potential rate hikes, complicating fiscal strategies amidst increasing debt servicing costs.
- Singapore's hawker centers face a decline in participation, threatening the survival of traditional cuisine as fewer individuals pursue the demanding profession.
Deep dives
Rising Government Bond Yields
Government bond yields are increasing rapidly across many developed nations, with key factors driving this trend. The yields on 10-year American treasury bonds are nearing 5%, a notable rise that influences mortgage and corporate borrowing rates. Investors' expectations regarding future interest rates—despite current central bank cuts—are pushing yields higher due to fears of potential rate hikes. This situation indicates that governments will face higher costs to service their debts, complicating their fiscal strategies as they often spend more than they collect in taxes.
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