by Wolf Richter
Wolf Street
Bring them on. Financial Repression has a huge cost.
Yields have been rising in anticipation of a tightening cycle, and they will rise further when the Fed actually raises rates and engages in quantitative tightening (QT). Rising yields reduce bond prices for investors who sell those bonds. Investors that hold bonds to maturity earn the yield at which they purchased the security, and at maturity they get paid face value. A few hedge funds might blow up along the way because their highly leveraged bets went awry. So for current bondholders, a tightening cycle is not pretty.