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misja111
6 days ago
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US Administration announces 34% tariffs on China, ...
Existing bondholders can't demand anything of course. But the bond price is determined by buyers and sellers. With dropping USD, buyers will pay a lower price for the bonds, i.e. the yield will go up.
lxgr
6 days ago
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Your model is missing the Fed, which can buy an almost infinite number of bonds to bring the effective interest rate down to whatever it wants.
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misja111
6 days ago
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You mean, by printing money. Well, if they would do that, the USD would sink even more and thus also the US bonds.
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