0 Morty Asked: October 7, 2019In: EconomicsWhy do bond yields go down when there is fear of recession/due to the trade war?0Why do bond yields go down when there is fear of recession/due to the trade war?In: Economics ShareFacebook 2 AnswersVoted rehcsel Added an answer on October 7, 2019 at 5:42 pm Bonds are a guaranteed return. Generally you can sign up for a bond that has a set maturity date and a set return. For example you could buy a bond from your city for $100 and in 5 years get $110 when you exercise that bond.When there is a trade war or any uncertainty investors will flee from the stock market due to the unknown risks the future holds. However they still want some return and will go to bonds. As such people selling bonds also want to save some money and know they can offer lower returns due to the influx of “scared investors”.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsApp bulksalty Added an answer on October 7, 2019 at 5:43 pm Bond yields move in the opposite direction of bond prices.So what’s really happening is people are buying bonds when there’s fear of recession. In a recession, businesses get less valuable because they make less money, but bonds pay the same amount as long as the payer survives.So, bonds are a better investment during a recession and people buying bonds means they think it’s more likely that a recession may occur, bond prices become a good predictor of recessions.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerLeave an answerCancel reply Attachment Select file Browse Featured image Select file Browse What is the capital of UK? ( London )Save my name, email, and website in this browser for the next time I comment.