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10 sats \ 1 reply \ @nkmg1c_ventures 16 Jun 2022 \ on: 10Y bond yields up 80% in Japan today. I guess the freefall started today. bitcoin
I recently started reading about yield curve control (YCC), which is the strategy their central bank has taken. If you google "yield curve control" + "federal reserve" you get articles about Yellen, Powell and previous Fed hotshots all being "interested" in the idea.
The whole idea (not a prof. econ guy, but I am a math guy) seems to be to stop government from defaulting on the debt by controlling the more future-oriented bond rates (10 year bonds), essentially trying to control or "peg" the interest rate to some value. It seems insane, you basically just keep printing money to throw at a problem to keep up appearances.
It's not just about defaulting on debt, more about using it to stimulate the economy.
https://www.brookings.edu/blog/up-front/2020/06/05/what-is-yield-curve-control/
This article is quite interesting in explaining how it actually reduced all the bonds they had to buy after implementation (until the current mass sell off)
There's a lot of game theory involved and now the tides are turned, this article is barely two years old and quite amusing everything is different now.
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