Niềm Tin-Bonds and Rising Inflation

"Khủng hoảng ở Hongkong, dịch Corona ở Trung quốc lan sang châu Âu và Mỹ bây giờ đang làm xáo trộn bao nhiêu cuộc sống. Nó phải làm chúng ta nhận ra giá trị của niềm tin vào con người và sự minh bạch của các thiết chế xã hội. Khi con người không còn niềm tin vào sự bình đẳng, công lý, và sự minh bạch của các thiết chế xã hội thì bạo loạn sẽ chỉ chờ lý do để nổ ra." from Ngo Bao Chau's Blog https://www.npr.org/2026/08/20/nx-s1-5937600/economy-bonds-inflation-debt-consumers The bond market is signaling trouble ahead. This is why you should pay attention August 20, 20265:00 AM ET By Rafael Nam Bonds are critical to the economy because they influence interest rates that people pay on many things. What matters most is the bond yield. Effectively, the interest rates paid by the government for its bonds become a useful benchmark for banks and other financial firms when they decide how much to charge for their own loans to customers. That's why hikes in bond yields can reverberate across the economy. Mortgage rates, for example, are influenced by the yields paid by government bonds (though there are other factors as well). And at a time when bond yields are rising, it's not surprising to see mortgage rates also rise. Last week, the average rate on a 30-year, fixed-rate mortgage hit 6.67%, nearly the highest level in a year, according to Freddie Mac. It's not just mortgage rates. Rising bond yields can also push up interest rates on credit cards, car loans — and all kinds of borrowing costs across the economy. And, obviously, rising bond yields impact how much the government itself has to pay in interest. The slumping bond market is sending yields sharply higher, so much so that the U.S. is now paying $3 billion in interest per day. In fact, interest payments are now the government's second-biggest expense, trailing only Social Security. If bond markets are so worried about the economy, why are stocks at record highs? That has been a big talking point on Wall Street. But keep in mind that these are two completely different markets. Bond investors care, primarily, about whether they'll get paid back. Hence, they demand higher interest rates when they start to get worried. But stock investors tend to make a more straight-up bet on corporate profits. Investors who buy Apple shares are betting, for example, that the company will sell more iPhones and iPads and that the stock price will rise. And right now, despite rising borrowing costs, companies are making some pretty decent profits, signaling that the economy may be doing well nonetheless. In other words, bond investors and stock investors tend to see things differently. Tax cuts are a good example of this divide. Generally, bond investors don't like tax cuts. It means the government will probably earn less and struggle more to pay back investors. But for stock investors, tax cuts are good. They can juice up spending by consumers or companies. But only to a point. If signs emerge showing that inflation or rising borrowing costs are starting to tamp down economic growth, by slowing down consumer spending for example, expect stock investors to join bond investors in worrying about the economy — and seeing trouble ahead. And right now, despite rising borrowing costs, companies are making some pretty decent profits, signaling that the economy may be doing well nonetheless. In other words, bond investors and stock investors tend to see things differently. Tax cuts are a good example of this divide. Generally, bond investors don't like tax cuts. It means the government will probably earn less and struggle more to pay back investors. But for stock investors, tax cuts are good. They can juice up spending by consumers or companies. But only to a point. If signs emerge showing that inflation or rising borrowing costs are starting to tamp down economic growth, by slowing down consumer spending for example, expect stock investors to join bond investors in worrying about the economy — and seeing trouble ahead.