WSJ What’s News - Why Rising Global Bond Yields Are Worrying Investors

Episode Date: September 3, 2025

P.M. Edition for Sept. 3rd. Global bond yields are climbing; yields on U.K. 30-year gilts this week hit their highest level since 1998. WSJ columnist Spencer Jakab explains what this means for investors. Plus, Florida is pushing to repeal all vaccine mandates, a move that would make it the first state to end such rules. And the U.S. now has over 1,100 billionaires, but where do they live, and what industries built their fortunes? WSJ data reporter Inti Pacheco shares what he learned from the data. Alex Ossola hosts.  Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're with Amex Platinum, you get access to exclusive dining experiences and an annual travel credit. So the best tapas in town might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at Amex.ca. bond yields around the world are rising, a sign that investors are worried. You're really entering a kind of a dangerous territory there because when central banks lend

a helping hand, it has happened before in history, to a government to pay the bills. That's tantamount to money printing. Plus, Florida may become the first state to end vaccine mandates. And here's what we know about America. America's approximately 1,100 billionaires. It's Wednesday, September 3rd. I'm Alex O'Sullough for the Wall Street Journal. This is the PM edition of What's News,

the top headlines and business stories that move the world today. Global bond yields are on the rise. Yesterday in the UK, the yield on 30-year gilts, their equivalent of bonds, hit its highest level since 1998. Long-term yields recently hit multi-decade peaks in France and Japan, too. In the U.S., the 30-year Treasury yield pulled back after briefly topping 5% this morning. For more, I'm joined now by WSJ Investing columnist Spencer Jacob.

Spencer, what is going on? Why is this happening? Well, there's a bout of anxiety about how governments finance themselves and the willingness of investors to extend themselves and take a risk on these longer maturity bonds, which in many countries are 30 years. taking the most risk because inflation has the most potential to destroy the value of those bonds. You're also taking a risk because should the unthinkable happen and those countries not be able to repay you or have to resort to some extreme measures to repay you, you're most exposed to danger. And so the people who play in that space generally are not you and I that used to be,

but it's pensions, insurance companies that really have very long-term liabilities and tend to buy these things. And even they are getting nervous. What is making investors nervous about these countries in particular? Well, what you saw in the UK, and you've seen in the last few days, is, and this is unusual, this is the kind of thing you do see in emerging markets, but not in a developed country like Britain. The currency is sinking at the same time that bond yields are rising. Generally, people are looking to put money to work around the world, and the interest rate rises in a certain country. That makes parking some money there more attractive. When those interest rates rise or the yields on the bonds that you can buy in that country rise

and the currency sinks, then you know you have a problem. It means that they're going to have to keep lifting that rate possibly and costing their government a lot of money because every time that a newer bond is issued, that's more of a strain on the treasury. And you're seeing that around the world. And just putting into context what you had happened the last 15 years or so in the world is that interest rates for much of that period in the developed world were very low. So governments spent a lot of money, especially during COVID. They had record budget deficits, including in the U.S. And now that interest rates have normalized a lot of the world, as those old bonds roll over

and you have to issue new ones to finance today's deficits, it's getting really expensive. The U.S., for example, pays a trillion dollars a year in interest, a trillion dollars. That's more than the entire defense budget. Given this situation, what would it take for investors jitters to be calmed? Well, one thing that probably won't happen in the U.S. but could happen in some other countries is if the government says, okay, we're going to bite the bullet and engage in some kind of austerity, we're going to raise taxes, we're going to cut spending. In the U.S., you have just seen contentious law passed that cut taxes. Budget deficits are going to be higher than they would

have been, and they already were fairly high. That's unlikely to change. Politicians are unlikely to say, oops, sorry, we're actually raising taxes on companies and individuals and especially rich people. What would not call people would be interference with monetary policy by the executive branch, which it hasn't been said explicitly, but is to help those deficits be more financeable. You're really entering a kind of a dangerous territory there, because when central banks lend a helping hand, it has happened before in history, to a government to pay the bills, that's tantamount to money printing, and that would possibly unleash a lot more inflation than we've seen. And if there's a lot of inflation, then any existing bonds that are

outstanding have their value debased and all kinds of other unintended consequences would ripple through the economy. That is the real nightmare scenario. That was WSJ investing columnist, Spencer. Thanks, Spencer. Thank you. Total open jobs in the U.S. unexpectedly slipped in July to $7.2 million, down from $7.4 million a month earlier. That's according to new data out from the Bureau of Labor Statistics today, which defied consensus expectations that openings would hold steady. Overall, the data paint a picture of a labor market that is slowing but hasn't stalled out. A more up-to-date look at the job market is due Friday morning when the BLS will publish the August jobs report.

In U.S. markets, tech stocks are back on top. The tech-heavy NASDAQ led gains today, adding about 1% fueled by Alphabet and Apple. Overall, major U.S. indexes ended the day mixed. The S&P 500 added about half a percent while the Dow was little changed. Meanwhile, gold futures rose 1.2% to close at a record $3,593.20 per Troy ounce. We're exclusively reporting that XAI's chief financial officer has left the company after only a few months on the job. That's according to people familiar with the matter. It's the latest in a string of high-profile departures from Elon Musk's artificial intelligence company in recent weeks.

Coming up, how did America's billionaires make their money? We get into the data after the break. Wait, I didn't get charged for my donut. It was free with this Tim's rewards points. I think I just stole it. I'm a donut stealer. Ooh. Earn points so fast, it'll seem too good to be.

be true. Plus, join Tim's rewards today and get enough points for a free donut, drink, or timbits. With 800 points after registration, activation, and first purchase of a dollar or more, see the Tim's app for details at participating in restaurants in Canada for a limited time. American Bitcoin, a Bitcoin mining and accumulation business backed by President Trump's two eldest sons, begin listing its shares today on the NASDAQ stock. exchange. Shares closed up about 17% at the end of the day. The latest test of investors' appetite for our Trump-linked crypto venture. Vicky Gouang covers crypto for the journal and is here now with more. Vicky, what does this business actually do? So what it does is it mines Bitcoin, which is

a complex process where a huge array of specialized computers, they try to solve these complex puzzles in order to unlock new Bitcoins. Also, part of American Bitcoin's business is to accumulate Bitcoin. You buy Bitcoin and put it on your balance sheet and try not to sell. Bitcoin, which is famously volatile, but it's not the Trump family's only crypto endeavor. Earlier this week on the show, we talked about another, a new digital currency called World Liberty Financial that just launched. Where does American Bitcoin fit in with the Trump family's crypto efforts? Well, in just a couple of months, maybe less than a year, the Trump family has reached into every corner of the crypto market. Bitcoin mining is a foundational part of the

crypto market because Bitcoin is the largest and oldest cryptocurrency. The Trump brothers, their desire, as they've said it, is that they hope that retail investors can access these opportunities. What benefit does this bring to the company? Well, both Eric Trump and Donald Trump Jr. hold shares in the company. So by bringing this company to the public market, their stake will be worth a substantial sum. That was WSJ reporter, Vicki Gohung. Thank you, Vicki. Thank you for having me. In other news, first Los Angeles, then Washington, D.C., now New Orleans might become the next city to get additional law enforcement from the National Guard, President Trump said today. During a White House event in the Oval Office, the president said that Louisiana's Republican governor, Jeff Landry, would welcome the federal assistance to combat crime. Posting on X after the event, Landry voiced support for Trump's proposal for Boots on the Ground in Louisiana, adding that he would accept National Guardsmen across the state.

And Florida is proposing to eliminate all vaccine mandates, including for school children. That would make it the first U.S. state to end immunization requirements. Florida has a law requiring children to be vaccinated for measles, mumps, and rebella, and other infectious diseases in order to attend school. The state currently offers medical and religious exemptions to those immunization requirements. Vaccine mandates have eliminated the threat of many infectious diseases, and medical experts say removing vaccine requirements undermines public safety. Florida Governor Ron Nassantis said he will work with the legislature to repeal any laws requiring vaccines, including mandates requiring children to be vaccinated, to attend school. As of last year, there were 1,135 billionaires in the U.S.

up from 927 in 2020. That's according to data from Altrada, a wealth intelligence firm. Collectively, they're worth about $5.7 trillion. But the data on those billionaires show that they don't all look the way you might expect. Journal data reporter Inti Pacheco recently dug into this and joins me now. Inti, I expect an American billionaire to maybe have made their money in tech and live in New York or California. Is that the right image of the American billionaire? It sort of is.

There are a lot of them who live in New York or California and a lot of them made their money in tech. But more of them actually made their money in finance or banking. But there's all kinds of billionaires. There's people who became billionaires, maybe in oil, maybe in roof. maybe in chocolates. They definitely skew older. A lot of them were over 65 years old. A lot of them were in their 80s. Most of them were men. I think it was about 85%. Were there any surprises that you encountered in this data? Well, one of the things we noticed fairly quickly was the amount of people in our list who inherited a lot of their wealth. A lot of families or dynasties were calling them,

like the Walton family that is tied to Walmart, the Cokes, for example, from Coke Industries, Pritzker's from the Hyatt, and also the Marse family from the company that made the candy bars. Collectively, each of these families has a group of billioners. We looked at how much money this family is held together, and it was about 15% of the total wealth,

about $5.7 trillion in total. There are some billionaires such as Bill Gates and Warren Buffett who have openly pledged to give away much of their wealth. How common is that and where is that money going? A lot of the billionaires have been pledging their money and there's a lot of education, a lot of like health care research, medical research. It's very common for billionaires to give away a lot of their money, but there were hundreds of billionaires on our list that hadn't given any money in the past 10 years, at least publicly. That was WSJ Data Reporter, Indy Pacheco. Thanks, Inti. Thank you.

And that's what's news for this Wednesday afternoon. Today's show is produced by Charlotte Gartenberg and Rodney Davis. Our supervising producer was Matthew Walls. I'm Alex Oslov for The Wall Street Journal. We'll be back with the news show tomorrow morning. Thanks for listening. Thank you.