The worst collapse of the Western government debt market since 1949 is coming. In an attempt to stop high inflation rates, Western central banks are raising interest rates, which brings the collapse of government bonds closer, writes Bloomberg.
“Sovereign bond markets around the world are on the cusp of their worst performance since 1949, when Europe was in ruins recovering from the Second World War,” the agency quotes experts from Bank of America.
The United States Federal Reserve System (FRS) and other Western central banks to support the economy have abandoned holding the base interest rate near zero, as they did during the pandemic. It was this circumstance that had the most serious impact on the upcoming collapse of the sovereign bond market, according to Bloomberg.
The agency notes that the decision of the US regulator announced this week to raise the base interest rate was the last serious blow to the global economy.
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