U.S. Treasury · Germany · Bloomberg · Fortune Technology
‘The U.S. is not the only game in town anymore’
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The bond market is one of the few forces in the world strong enough to get politicians to snap to attention.
Key facts
- Yields on U.K. bonds have reached 5.81%, and German bonds are also paying 3.76%, versus 5.27% for a comparable U.S. bond
- The federal government has already paid $931 billion in interest on its debt through the first 10 months of its fiscal year, which ends in September
- But if the bond starts to look less attractive, a buyer can get bonds that were earlier worth $100 for less
- Now the U.S. 30-year yield has to compete with all these other sovereign bonds,” Jersey said
Summary
This week rising bond yields forced the U.S. Treasury Department into an unusual intervention and raised the specter of higher borrowing costs putting the brakes on consumer spending, the lifeblood of the economy. Here’s a look at what’s going on and how it affects everyone:. When governments and big companies borrow money, they don’t ask a bank for a loan. Investors in the bond market often buy and sell these bonds after they’re issued, and they continue to pay the same interest rate.