In our latest episode of Market on Close, John Rowland, CMT, answered a question from “Twitter Tom” about global bond yields and why traders and investors should care. His response was a warning — and a lesson about the Federal Reserve.
Central banks around the globe have been cutting short-term interest rates. But long-term bond yields are still climbing. Why?
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Long-term rates impact consumer loans, mortgages, corporate debt, and government borrowing far more than short-term rates.
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Higher yields mean higher borrowing costs, which can ripple through global economies and financial markets.
Governments, particularly in Europe, are facing increased deficit spending and higher defense budgets. That means more bond issuance. More supply → lower prices → higher yields.
At the same time, we’re in the longest drawdown in government debt demand in history — 61 months. Investors across G7 markets have been hesitant to buy bonds.
More supply + less demand = falling bond prices. And when bond prices fall, yields rise.
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Rising yields can pressure equities, particularly growth and tech stocks, as borrowing costs rise.
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Higher long-term yields also compete with stocks and risk assets for investor capital.
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Yield curves shape everything from bank lending to currency values.
For traders, this means yields aren’t just “background noise.” They’re market drivers.
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Use the Economic Calendar to track upcoming inflation releases, central bank meetings, and other key yield-moving events.
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Check Treasury Yields and compare maturities to spot curve shifts that may hint at equity rotations.
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Monitor sector ETFs with Barchart’s ETF Screeners to see how rising yields are impacting banks, utilities, and tech.
Bond yields are more than a macro headline; they’re a pulse check for the entire market. More debt issuance, less demand, and sticky inflation mean higher yields may be here to stay.
Watch the clip here:
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On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
