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Creditors can't raise rates on bonds. When you issue a bond, you get paid then, and the creditor gets paid later. They can raise rates on new issuance, but the
by wbl 12y ago
Creditors can't raise rates on bonds. When you issue a bond, you get paid then, and the creditor gets paid later. They can raise rates on new issuance, but the inflation rate is determined by monetary policy, not so much fiscal policy.
- toyg 12y agoNation-states are constantly refinancing or issuing new debt, sometimes daily. The pool of potential creditors for this sort of debt is very limited, and will react pretty quickly to changes in almost any area of public policy by shunning your debt if rates are not to their liking. Also, some of this debt is auctioned, with results indicating what the market thinks of proposed rates. So yeah, in practice creditors can alter rates.