Bond yields are not “warning” governments to behave—they’re exposing a system where central banks and treasuries can backstop the entire market whenever they choose. Steve says the panic around government debt is mostly an economic fairy tale, and the real danger is what happens when policymakers let that fiction dictate spending.
Phil presses him on the recent surge in 10-year and 30-year yields, the role of bond vigilantes, and the idea that higher rates are supposedly needed to fight inflation. Keen argues the opposite: bond sales often cancel out government money creation, while fear of the bond market can choke off the spending needed for jobs, infrastructure, and real growth.
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