Is it the government that increases bond yields?
When the markets were volatile last week due mostly to bond yields, was it the government that increased bond yields??? This caused the prices of other bonds to go down and also increasing their yields?
Or was it an auction type process that the government does and the yields increased this way?
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Answer by troyboy
bond yields go up in the market when people are selling bonds. That's what happend last week. Because there was new information out that led investors to believe that the Fed would raise rates, investors sold off their bonds which lowered bond prices which raised bond yields.
The answer is yes, the Fed can raise rates on new bonds comming out, but last week's rise in rates was due to a bond market sell-off.
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