How soaring bond yields pressure big economies like the US, France - The Christian Science Monitor
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Even boring old bonds can get exciting sometimes. Since July, they’ve been especially feisty. Interest rates on the 10-year U. S. Treasury bond have jumped a full percentage point to levels not seen in more than 20 years. That quick rise in interest costs is now reverberating throughout the global economy. In the United States, it is pushing up interest rates on everything from mortgages to small business loans. More worrying, globally, it is making it much more expensive for heavily indebted governments to service their debts.
Ironically, government bonds – that safe place where investors park their money when stock markets get dicey – are now themselves stoking uncertainty and fear. At the heart of that fear is the possibility that one or more nations could default on their debt. These nations aren’t the usual suspects: developing countries with weak economies and small footprints. They’re major, developed nations. The current focus is on France.
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