BONDS

Consumers have become used to ultra-low rates.


Governments and businesses have also borrowed hard since the pandemic began with minimal repayments allowing them to spend without too many worries.


Low bond interest rates – yields – equal high bond prices, raising concern over the potential for a bust according to a Yahoo Finance article:


"Businesses worldwide have borrowed heavily. Non-financial businesses’ debts in advanced economies boomed from 165pc of GDP in the final months of 2019 to 185pc by the end of 2020, according to the Bank for International Settlements. In emerging markets it jumped from 147pc to 173pc of GDP. It leaves borrowers vulnerable to a jump in rates."


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