Why Bond Yields Are a Key Economic Barometer | WSJ

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U.S. government bond yields aren’t just a barometer of the economy, they also influence the cost of borrowing, from mortgages to student loans. WSJ explains how they work and why they’re so crucial to the economy. Photo illustration: Tom Grillo/WSJ

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49 COMMENTS

  2. Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $410K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.

  6. We are having a yield here and there is a safe investment and very confident with my accessory yield.There is a fed that will raising it to0.
    The economy has grow older and it raises well.

  8. A yield inversion is more of a self fulfilling prophecy than a key economic barometer. It doesn't cause recessions by any means. It's sentiment…and the sentiment was incorrect this time.

  9. The Market have been suffering over the past month, with all the three indexes recording losses in recent weeks. My $400,000 portfolio is down by approximately 20%, any recommendations to scale up my returns before retirement will be highly appreciated.

  10. Stocks are falling and bond yields are rising, but markets still don’t seem convinced the Federal Reserve will pursue plans to keep increasing interest rates until inflation is under control. I'm still at a crossroads deciding if to liquidate my $117k stocck portfolio, what’s the best way to take advantage of this bear market?

  12. The primary cause of inflation is printing money. If raising interest rates alone would lower inflation then Argentina wouldn't suffer from it. Interest rates in Argentina are over 100 percent. Yet their rate of inflation is over 100 percent. Argentina has printed too much money. As did the US. Especially during the pandemic.

  13. It's amazing to see AMC doing well after all the doomsday analyses from naysayers. The stock market is a device for transferring money from the impatient to the patient – warren buffet. It's good to remind people of this right now; you buy on fear and sell on greed or just hold through it all for the long term. It’s easy but lots of people forget.

  15. @2:00 "If the economy is doing well . . . rates rise." Unless Brandon is president, in which case if the economy is sliding into recession, the reserve currency is at risk, and we move steadily to WW III rates still go up. Stop Voting For Democrats.

  19. Even if bond yields are rising while stock prices are decreasing, the markets are still skeptical whether the Federal Reserve will stick to its goal to raise interest rates until inflation is under control. As I'm still debating whether to sell my $401k worth of equities, what is the best way to profit from the current down market?

  22. Ok so so first the fed gets everyone in dept. with low interest rates and then they raise interest rates so that everyone has much higher bills and if that wasn't bad enough the saving that we have is robbed by the feds inflation, and by raising rates it causes a recession and people lose their job, house and assets go back to the fed and bankster when people are forced to file bankruptcy. Yes the fed is very good at what they do. they are private bankers

  24. Munger and Buffett have both achieved an incredible feat with Berkshire. They've turned thousands to billions, and have made a lot of people wealthy in the process. I really saw the potential of the stock market by reading Berkshire's annual letters. I recently sold my $674k apartment in the Bel Air area and I'm hoping to throw it into the stock market. I just don't want to lose everything.

  27. You miserable consumers!
    First you weren't spending enough.
    Now you're spending too much.
    Not you millions of 10%ers…
    It's you one hundred million regular normal middle class folks. This is all YOUR fault!

    I'm going to go listen to George Carlin's Advertising Lullabye now

  29. If the economy goes up, the rates go up… but this is not an automatic decision by the market… this is a professional decision by the federal reserve, as a reaction to inflation, which could be on time, or could be late… please anyone correct me if I am wrong.

  30. 1994- YAHOO TIME⌚ TO DISCONNECT WITH PUBLIC /1998 GOOGLE🗺️ ALPHABET🔡 LARGEST MARKET CAP AMONG ALL /2006-BING , 2009-LIVE SEARCH MICROSOFT /1JANUARY BAIDU CHINESE🇨🇳 YANDEX RUSSIA – GK QUESTION🙋 NO CURRENCY REWARD HUNT HUMAN FOR CURRENCY & FOOD 🍲(2) BOND YIELD INVERSELY PROPORTIONATE TO STOCK RETURN BOTH ARE UNCERTAIN

  31. 2:22 “when the price goes down the yield goes up” is she referring to yield based on paying the new price of $922? Eg the coupon is still actually 4% but because the bond only costs $922 now that actually works out at 5%?

  42. Correct me if I am wrong. higher bond yields means fed want from businesses not to spend on the economy during high inflation. They just want to absorb excessive liquidity from the market to tame inflation. so high yields attract businesses or investors during these harsh times when the market is down. Is it correct?

  43. May thang Lanh Dao Ha Noi Theo Russia no quay. Vi vay dung nhu Tao da du doan: bon may giu tao co Chu y, the Tao LENH bat nhot bon may. Dat nuoc Theo My, West. The xong. Ngay sang nay phai xong. LENH ROI.

  44. The majority of my holdings ($650K) are Nasdaq, Apple, and Tesla stocks, respectively. I got in early but am undecided whether to sell or purchase back at reduced prices owing to the present market condition.

  46. Fed reserve and the treasury is not bothered about stock capital market. They are more concerned about the treasury bond market. They fear the bond market may become dysfunctional and illiquid. Bond yields are one of the important parameter that influences stock market. All stock pundits fail to mention how the bond yields influence stock market. My main concern now is how we are going to achieve all of that given that the market has been a mess for most of the year. I already lost $23,000

  47. Most of that "Inflation" was a) price increase in commodity markets and b) price gouging by the industry.
    It's not that consumers during COVID lockdowns had consumed more. The working class struggles to survive. How can they create demand? People should watch Chris Martensen's lectures about the bond price death spiral.

  49. The last note is the funniest thing I have heard in economics lately. Higher bond yields cooling the economy and bringing down inflation in the long term….
    Unless a central bank tries to save the treasury from going belly up, going into the secondary market and bidding on government debt. Or just the attempt of it, like Japan this week

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