Bond market sell-off sends warning to countries running high debt | DW News

When governments spend beyond their means, they sell bonds to finance their debt. It allows countries to kick the can of balanced budgets down the road, until they hit a dead end. Now a major sell-off on global bond markets is pushing borrowing costs higher and forcing some hard choices. Is bond market warning governments that the era of cheap money is coming to an end? What will be the impact on the global economy?

DW speaks to Carsten Brzeski, Global Head at Macro Research and Chief Economist at ING Germany, on US economic interventions

Chapter Breakdown
0:00 Why yields go up when bond prices go down
0:36 James Carville, strategist for establishment Democratic candidates, former Bill Clinton campaign strategist, on why the bond market is so consequential
0:52 US Treasury Secretary Scott Bessent announces bond buyback scheme
1:14 US President Trump on whether he directed Bessent to do the intervention
1:56 Markets react to US debt (40 trillion USD) and the war in Iran, with 10-year US Treasury yields approaching 5% and Japanese, German, and UK borrowing costs also increasing
2:22 Carsten Brzeski, former employee at the Dutch Finance Ministry and European Commission, on Trump's comments impyling the US military can solve economic issues
3:07 How does American military power and dollar dominance go hand in hand?
3:56 Brzeski argues that US dollar hegemony is not (yet) over
#dwcurrentaffairs #bondmarket #scottbessent
5:31 Why the war in Iran has pushed up energy prices and rates
6:05 Bessent's unusual bond intervention: why Treasuries typically do not intervene in capital markets
7:12 Interventions such as Bessent's only work if accompanied by fiscal policy changes
7:20 Can markets ignore worsening public deficits?
7:46 Markets "repricing" their inflation expectations, given their realization that the US is in a "forever" war in Iran
9:09 "End of the welfare state" with rising spending on defence in Germany

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