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.

  • HobbitFoot English
    42·
    1 day ago

    I can see Texas being relatively well off. Quality of life for the poor is going to drop, but the state has a relatively diversified economy.

    • GreyEyedGhost@lemmy.ca
      4·
      17 hours ago

      But they already have 3rd world status outcomes for maternal mortality, so don’t expect it will get better for the middle class. But I’m sure the rich will get richer!

      • HobbitFoot English
        32·
        17 hours ago

        I’m not expecting it to get better for the middle class. However, Texas has enough resource extraction and high value manufacturing where the state probably could weather independence.