A government debt sale this week went poorly because potential buyers were spooked by tariffs.
In an uncertain environment, companies are less eager to take on debt and investors are charging more to lend.
High tariffs could spur inflation and hold back employment, pulling the Federal Reserve in different directions on interest rates.
Buying a bond is usually like going for ice cream (to a regular ice cream place): You pick your flavor, you pay, you enjoy a nice, predictable payoff. Lately though, that’s not the deal.
The new administration hopes that energy dominance and government efficiency can bring down borrowing rates.
Higher yields compensate for the higher risk of investing for 10 or 30 years, when it’s hard to predict how that future economy might look.
Investors expect a healthy economy and strength in the private sector, which is limiting the rise in corporate bond yields.
The market is especially tuned in to whether we will have a divided government after the elections.
Rising bond prices mean lower interest rates, indicating that the market is betting on rate cuts by the Federal Reserve.
What are they saying?
