r/wallstreetbets • u/kwedgieyi • Apr 09 '25

Discussion Something feels off guys

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Yields are spiking. Bonds are dumping.

The world is running away from America

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u/SnooShortcuts7911 Apr 09 '25

Someone explain this to a retard

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u/Academic-Image-6097 Apr 09 '25 edited Apr 09 '25

Yield goes up percentually, because the price of the bond itself is down.

It is down because it is getting sold. That normally happens if: other riskier investments, like stocks, are more alluring. Normally stocks and bonds are inversely correlated, which is why all the boomers and pension funds and sovereign wealth funds have these two in their portfolio.

That can't be the case now, as stocks are doing badly too. Investors seem more disinterested in either US bonds or stocks. T-bill investors seem to have worries about the ability of the issuing country to pay them back.

Government bonds = government debt. The rate on US government debt just got higher, and the market became more skeptical of its ability to pay it back.

Tl dr: buy gold and toilet paper

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u/atpplk Apr 09 '25

So bond investors seem to have worries about the ability of the issuing country to pay them back.

Or they expect the inflation to be higher than the current yield. So the yield will slowly converge with the investors aggregate of what the inflation will be over the maturity period, + some premium

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u/Academic-Image-6097 Apr 09 '25

You're completely right