Wang Bi Says Rising Sovereign Yields Reflect Market Pricing Of Fiscal Imbalance

Rising government bond yields in major economies are adding downside pressure to equities, according to Ming Pao. Hong Kong Austrian Economics Institute president Wang Bi said governments have long relied on quantitative easing and debt expansion, with risks often surfacing in a non-linear and concentrated way. He said fiscal welfare policies in the West are often difficult to reverse because of political considerations, leaving structural fiscal deficits in a difficult position. Wang added that the recent surge in sovereign yields across major economies shows markets are increasingly pricing in governments with fiscal imbalances.