Why everyone is watching them closely

Stock markets around the world have been relatively settled this week after a period of chaos, sparked by US trade tariffs.

But investors are still closely watching a part of the market which rarely moves dramatically – the US bond market.

Governments sell bonds – essentially an IOU – to raise money for public spending and in return they pay interest.

Recently, in an extremely rare move the rate the US government had to pay on its bonds rose sharply, while the price of bonds themselves fell.

The volatility suggests investors were losing confidence in the world’s biggest economy.

You may think it’s too esoteric to bother you, but here’s why it matters and how it may change President Trump’s mind on tariffs.

When a government wants to borrow money, it usually does so by selling bonds to investors on financial markets.

A bond is essentially an IOU – in return for an…