Date: May 16th, 2024 8:24 AM
Author: Marvelous submissive skinny woman
I don't think the steadily rising Russian bond yields are getting as much attention as they deserve. The yield on their 10 year bond was around 12.2% in late January and is over 15% now. Their central bank is warning it will likely stay high and may go higher:
https://tradingeconomics.com/russia/government-bond-yield
By comparison, the US 10-year bond yield, for all our fiscal problems, is only at 4.35%, which means it's vastly more expensive for Russia to borrow to finance its military spending than it is for the US.
What could explain this rise in Russian bond yields? Aside from inflation in Russia, which is bad enough for a government that might want to print rubles to finance the war, the rise in yields could suggest that the Russians have been financing the war with their remaining currency reserves but that those are being exhausted and they are now having to rely on more borrowing. What happens when a government needs to borrow more than the market is willing to loan them? They have to pay higher yields.
The fact that Putin just appointed economist Andrei Belousov as defense minister may suggest that he regards paying for the war as the primary challenge Russia faces now. There's been talk that the Russian economy might eventually start cracking under the strains of the war, and these may be signs that this is occurring.
It's obvious that Ukraine is facing a lot of struggles with manpower and energy infrastructure issues, but it seems Russia is facing its issues as well. I'm not sure if this will lead to pressure for a cease fire, but it seems possible it will.
(http://www.autoadmit.com/thread.php?thread_id=5529091&forum_id=2#47666243)