Government support programs announced so far come to well in excess of $2 trillion for the G7 economies. Several countries have indicated more is to come.
Germany alone could raise up to 35 billion euros of new debt this year, according to some estimates - around 17% percent more than already budgeted. Italy was the worst-hit market on Wednesday. Its 10-year yields blew out 60 basis points to 3% before pulling back after the Bank of Italy intervened on behalf of the European Central Bank and after a report that EU leaders are working on a plan that may lead to crisis purchases of Italian bonds by the ECB.
Some investors believe Germany may consider the idea of pooled euro zone bonds, which it has long opposed. German Chancellor Angela Merkel on Tuesday acknowledged this was being discussed and did not rule anything out. Earlier, Japanese yields rose to the highest since Dec 2018 and British government 10-year borrowing costs rose almost 30 bps, the biggest one-day rise since 1998Andrew Sheets, chief cross-asset strategist at Morgan Stanley, said a steeper U.S. yield curve should be welcomed because long-dated borrowing costs rising more than short-dated ones implied better growth prospects ahead.
Tell them to just print more money. It may cause a small bump in inflation but there is no reason to pay more for money.
Why do we have to borrow our own money?