唐华斑竹
--
U.S. Treasury Bonds Sold Off, Why Do Yields Soar Instead?
Why do yields soar when Treasury bonds are sold off?
U.S. Treasury bonds are essentially IOUs issued by the U.S. when it borrows money, stating that the U.S. Treasury promises to repay a specified amount on a certain date (e.g., $100), and how much interest it will pay you each year (e.g., 3%) from now on.
Currently, Japan holds $1.2 trillion in U.S. Treasury bonds, meaning it has a bunch of these IOUs, with a total face value of $1.27 trillion. Now, if Japan no longer wants to hold these IOUs and wants to exchange them for cash to spend, but it is not yet time for repayment, it needs to sell these IOUs to someone else to convert them into cash.
U.S. Treasury bonds are essentially IOUs issued by the U.S. when it borrows money, stating that the U.S. Treasury promises to repay a specified amount on a certain date (e.g., $100), and how much interest it will pay you each year (e.g., 3%) from now on.
Currently, Japan holds $1.2 trillion in U.S. Treasury bonds, meaning it has a bunch of these IOUs, with a total face value of $1.27 trillion. Now, if Japan no longer wants to hold these IOUs and wants to exchange them for cash to spend, but it is not yet time for repayment, it needs to sell these IOUs to someone else to convert them into cash.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
