Why Government Bond Yields Inverse to Prices

In this episode of Government Spending with Fexingo, Lucas and Luna break down the inverse relationship between government bond prices and yields—and why it matters for taxpayers. Using the 10-year Treasury as a concrete example, Lucas explains how a bond's coupon, price, and yield interact, how the secondary market drives yields, and what a rising yield means for future borrowing costs. They explore a specific scenario: a $1,000 bond with a 2% coupon trading at $800, yielding 2.5%. Lucas walks through the math and the implications for government debt service. Luna challenges whether voters grasp this mechanism when they hear about rising rates. The episode demystifies a core concept that connects central bank policy, fiscal budgets, and everyday public finance. #Bonds #Treasury #Yields #InterestRates #DebtService #FiscalPolicy #PublicFinance #Economics #GovernmentSpending #Budget #10YearTreasury #CouponRate #SecondaryMarket #BondMarket #FedPolicy #FexingoBusiness #BusinessPodcast #FinanceExplained Keep every episode free: buymeacoffee.com/fexingo