Then, inflationary expectations will increase, long-term government bond yields would rise and borrowing rates will go up sharply, leading to stagflation.
Investors looking for a medium- to low-risk route to income investing are increasingly turning to the corporate bond market as an alternative to equities and government bonds.
They are eager to buy their government bonds.
If interest rates rose, then the value of the government bonds the Banks hold would plummet.
Until now, they have been mostly sheltered in Japanese government bonds and other low-risk investments.
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