Economics Bonds Questions
Geopolitical events can have a significant impact on bond prices. When there is political instability or uncertainty in a country or region, investors tend to seek safer investments, such as government bonds, leading to an increase in demand for these bonds. This increased demand drives up bond prices and lowers their yields. Conversely, if geopolitical events create a perception of increased risk, investors may sell off bonds, leading to a decrease in prices and an increase in yields. Overall, geopolitical events can cause fluctuations in bond prices as investors react to changing levels of risk and uncertainty.