The Kobeissi Letter|May 25, 2025 20:11
Something does not add up here:
The Bank of Japan currently has a policy rate of 0.50% and Japan has a Debt-to-GDP ratio of 250%+.
Meanwhile, Germany has a policy rate of 2.25% (4.5x higher) and a Debt-to-GDP ratio of just 62% (1/4 of Japan's).
However, 30Y Government Bonds in Germany and Japan both yield ~3.1%.
What is happening here?
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