/biz/ - Business & Finance

>>22399047
good question. your statement is right, bond yields decrease as the price (remember, price and value are very very different. you had value instead of price) of aftermarket debts increase.

just as in any bubble, there is a point at which selling begets more selling, and a panic can happen. So the demand of the bonds would drop, and consequentially the yields of the bonds would rise.

who cares?

well, as yields rise, stock prices fall. (i can go into more detail if needed)

if stocks fall, then normies panic and stop buying shit, banks stop lending, and the economy stops (see 2008).

there's one thing that can stop this domino effect from happening, and that is not letting yields rise (same as saying, not letting demand for bonds drop).

That is why the fed is buying bonds, to keep the yields low.