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This is the forty-fifth video installment from Porkopolis Economics, covering macro and money, from the creator of the Crypto Voices podcast.
Contents
00:00 Intro
01:22 Bond price and yield are inversely related
00:50 How important is the bond market?
01:59 10-yr note price sensitivity per 1% YTM change
07:10 Other duration bond price sensitivity
09:18 What happens when yields fall? Happy days...
13:00 What happens when yields don't change?
13:51 What happens when yields rise? Pain...
19:16 What is different now, compared with 30 years ago?
Here we look at the main reason why banks are struggling today, and in general: The prices of government bonds have fallen drastically in the last year, as bond yields (or interest rates) have risen. This is the main reason why banks like SVB and others are failing. We continue on with last video's theme, but this time we take a look at bond durations above and below 10 years, from 1 year bills, to 50 year bonds (which exist in some countries, though not the US).
Remember, the price/value of bonds moves in the opposite direction of their yields/rates!
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Show content is not investment or financial advice in any way.