Mark Whitehouse, Columnist

The Bond Market Still Thinks Brexit Is Bad

Investors in government securities, unlike those buying stocks, take a dim view of the economic repercussions.

July 15, 2016 at 5:40 AM UTC

Mark Whitehouse is a member of the editorial board covering global economics and finance. Previously, he reported on economics for the Wall Street Journal and was managing editor of Vedomosti, a Russian-language business daily.

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Were concerns about the repercussions of Britain's vote to leave the European Union overblown? Although the rebound in global stock markets might suggest so, bond markets aren't so sure.

People who invest in 10-year government bonds have to take a long view. The securities' value depends on what central banks will do with short-term interest rates over the next decade, which in turn depends on how the economic outlook develops. All that information is reflected in the bonds' yields, which -- assuming investors see little risk of default or runaway inflation -- rise and fall together with nations' perceived prospects for growth.