
If you know one thing about bonds, know this: A sharp sell-off is shaking the bond market, and it has big implications for both the economy and your pocketbook.
To understand why the sell-off matters, it helps to understand how bond markets work — and why they are sounding alarm bells about the U.S. government’s record-shattering debt levels and the path for inflation.
Here’s a simple and handy guide to make sense of what’s going on.
How do bond markets actually work?
Bonds are essentially like loans. The U.S. government — like just about any other government in the world — needs to borrow money to afford all its spending, including spending on federal employee salaries and Pentagon projects.


