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Higher bond yields signal an end to cheap borrowing

Reported · Written up by our desk · Central Banks

Forexlive argues that the market is moving away from an era when borrowing costs were unusually low, pointing to bond yields rising to fresh multi-decade highs.

The outlet says that as yields climb, the cost of financing increases for borrowers, using an example where a $100,000 loan at 2% interest would cost $2,000 annually, while a 6% rate would cost $6,000 annually.

Forexlive adds that governments borrowing heavily to fund items such as infrastructure and defense spending face pressure as financing becomes more expensive.

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