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- cross-posted to:
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Investors are selling off bonds from the U.S. government, as part of a trade known as “Sell America.”
The United States government has had to pay more to borrow in the global debt markets. On Wednesday, the Treasury department found that there was tepid demand for an auction for $20 billion worth of bonds, and ended up paying a slightly higher interest rate (or yield) than expected.
This has spooked markets. Yields on 30-year U.S. Treasuries have spiked above 5% this week — an unusual, and unsettling, surge in the price that the U.S. government pays on its long-term debt. An increase in bond yields is particularly damaging to the economy because it jacks up the interest rates on many things that consumers pay, such as on mortgages and other loans.
Given that some Danish savings accounts had negative interest for a while, I’d believe it.
When we bought our house a few years before COVID we paid 0.5% interest on our fixed rate loan. But it wasn’t long after, that you could loan to buy a house at negative rates! But those were not the fixed rates. But fun times. 😋
And yes bank accounts also had negative interest rates, but usually you were spared if you had less than $30k in the bank.