During the early 20th century general business conditions were favorable so this lead bonds to increase. What this caused was the higher prices for the bonds, but in return, this lowered the yields of the bonds. Then the Great Depression hit, in the early 1930’s. This caused businesses to go out of business, as there was a loss of profit. This also cause the yield of bonds to be depressed and the bonds cost even more during this time.
In the 1970’s, we began to see inflation. With the inflation happening, this caused interest rates to rise. It did not begin to balance out, until what is referred to the ending of the Cold War. This allowed other countries to begin competing against each other, causing the interest rates to reduce and
In the 1970’s, we began to see inflation. With the inflation happening, this caused interest rates to rise. It did not begin to balance out, until what is referred to the ending of the Cold War. This allowed other countries to begin competing against each other, causing the interest rates to reduce and