About this episode
The episode discusses the implications of Japan's bond yield and the potential risks of rising bond rates amid indecision from major central banks.
This is the latest in my series of podcasts explaining how economics works in the credit crunch and now virus pandemic era. This week I give my thoughts on : Japan’s 40-year bond yield at ~4% cuts both ways — it signals a healthier, post-deflation economy and helps pensions/insurers, but raises government borrowing costs and risks financial instability if the shift is too fast. Q: what do you think will happen? With Bailey, the Fed and the ECB suggesting that they sit and wait on interest rates, is it possible that bond rates rise further than they have already while they dither? Could this lead to a bond/financial crisis?
Topics covered
- economics
- bond market
- financial stability
- government borrowing
- credit crunch
Keywords
- Japan’s 40-year bond yield
- post-deflation economy
- government borrowing costs
- financial instability
- interest rates
Mentioned in this episode
Places: Japan
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