The yield is the interest rate paid on the bonds issued. As the U.S. becomes a worse credit risk, investors demand additional interest to compensate for the risk. Existing bond values tank, because they were issued at a lower rate, and accordingly are paying less than bonds currently issued. Here is an archive link to a recent Economist article discussing the issue.
The yield is the interest rate paid on the bonds issued. As the U.S. becomes a worse credit risk, investors demand additional interest to compensate for the risk. Existing bond values tank, because they were issued at a lower rate, and accordingly are paying less than bonds currently issued. Here is an archive link to a recent Economist article discussing the issue.
But those bonds also prop up the value of the dollar so if existing investors decide the bonds are no longer worth holding onto…