Posted 10/5/2023, 10:03:02 AM
Rising Bond Yields Spark Concerns of Market Turmoil as Central Banks Taper Support
- Interest rates on US treasury bonds are rising rapidly, potentially causing market turbulence
- Supply of bonds is outpacing demand as governments issue more debt that central banks no longer subsidize
- Higher interest rates create a vicious cycle where governments must issue even more bonds to cover increased financing costs
- Rising rates may trigger sell-offs in stocks and real estate as investors shift to higher yielding bonds
- Central banks want to prevent a crash but won't provide massive rescues until inflation is under control