In short, if the government plans to spend a lot, and people worry about prices going up, bond yields rise. This can make borrowing more expensive for everyone
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Government Budget: When the government makes a plan for how to spend money (the budget), it can include a lot of spending on things like roads, schools, or healthcare Or Tax cuts or Big Beautiful Bill
Rising Bond Yields: If people think this spending will cause prices to go up (inflation), they want more money back for lending to the government. So, they ask for higher interest on bonds, which is called a higher yield.
Why It Matters:
More Expensive Loans: If bond yields go up, banks might charge more for loans (like for houses or cars), making it costlier to borrow money.
Investing Choices: People might choose to invest in bonds instead of stocks if they think bonds are safer or offer better returns.
In short, if the government plans to spend a lot, and people worry about prices going up, bond yields rise. This can make borrowing more expensive for everyone
Tap for longer
Government Budget: When the government makes a plan for how to spend money (the budget), it can include a lot of spending on things like roads, schools, or healthcare Or Tax cuts or Big Beautiful Bill
Rising Bond Yields: If people think this spending will cause prices to go up (inflation), they want more money back for lending to the government. So, they ask for higher interest on bonds, which is called a higher yield.
Why It Matters:
So I’m gonna go from a 27% interest rate on my emergency credit card that is always at its limit to, what, like a 35% interest rate?