This is the latest in my series of podcasts explaining how economics works in the credit crunch and now virus pandemic era. This week I give my thoughts on : Japan’s 40-year bond yield at ~4% cuts both ways — it signals a healthier, post-deflation economy and helps pensions/insurers, but raises government borrowing costs and risks financial instability if the shift is too fast.

Q: what do you think will happen?

With Bailey, the Fed and the ECB suggesting that they sit and wait on interest rates, is it possible that bond rates rise further than they have already while they dither? Could this lead to a bond/financial crisis?