Bond investors have faced negative returns due to events such as 9/11 and the COVID-19 pandemic. This has led to central banks implementing easing measures.
Rising bond yields suggest that borrowing costs may rise, potentially impacting industrial output. The U.S. Federal Reserve and the Reserve Bank of India are aware that elevated yields can help prevent capital outflows, highlighting the delicate balance central banks must maintain in managing economic stability.
While there is a prevailing belief in India that equities dominate investment opportunities, the reality is that bond markets also play a crucial role in the global landscape.