This news podcast from The Economist discusses rising government bond yields globally and their impact. The podcast begins by explaining the phenomenon of rising yields despite central banks cutting interest rates, attributing it to investor expectations of future rate hikes and persistent inflation. It then explores the role of potential US government policies under Donald Trump's second term in fueling these anxieties, highlighting concerns about immigration policies and tariffs. Finally, the discussion turns to the limited options available to governments to address rising borrowing costs, emphasizing the difficult trade-off between spending cuts and economic growth, and concluding with a somewhat pessimistic outlook for consumers facing higher borrowing costs and inflation. For example, the podcast cites the UK, where despite interest rate cuts, new mortgage rates are around 6.75%.
