The economic power of BTS

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**Kimberly Adams** (0:25)
A global sell-off in the bond market and the economic power of BTS.
From Marketplace in Washington, I'm Kimberly Adams. Global bonds are having a rocky start to September. There's a worldwide sell-off underway as investors decide that holding on to their older bonds could be a risky bet. Marketplace correspondent, Nancy Marshall-Genser, joins me now to explain why. Good morning, Nancy.

**Nancy Marshall-Genser** (0:50)
Good morning.

**Kimberly Adams** (0:51)
So what is happening with bonds? Why the big sell-off?

**Nancy Marshall-Genser** (0:55)
Well, investors think the yield, the interest rate for bonds sold in the future, will rise. So they're trying to get rid of their older bonds, which pay a lower yield.

**Kimberly Adams** (1:05)
Okay, that makes sense. But how can they be so sure that interest rates for new bonds will increase?

**Nancy Marshall-Genser** (1:12)
Well, for one thing, investors now expect the Federal Reserve to raise interest rates, possibly at its next meeting later this month. They were listening closely on Friday when Fed Chair Kevin Warsh made his big Jackson Hole speech and promised the Fed would tame inflation. One way it does that, of course, is by hiking interest rates.

**Kimberly Adams** (1:31)
Why are governments all over the world borrowing so much in the bond market anyway?

**Nancy Marshall-Genser** (1:36)
Well, countries like the US and Japan are running huge budget deficits, and they are having to borrow a lot by issuing bonds. With such a huge supply of bonds, governments have to offer a higher yield or interest rate to attract investors.

**Kimberly Adams** (1:51)
But all of this is not happening in a vacuum. What effect does the bond market and what's going on there have on stocks?

**Nancy Marshall-Genser** (1:58)
Well, stocks can fall if bond yields rise. Investors are figuring bonds are safer than stocks, so why hold riskier stocks when you can get rock-solid bonds with a really good, almost guaranteed return on your investment? So they ditch their stocks and buy bonds instead.

**Kimberly Adams** (2:17)
Marketplace correspondent, Nancy Marshall-Ginzer. Thank you, Nancy.

**Nancy Marshall-Genser** (2:20)
You're welcome.

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**Kimberly Adams** (4:01)
South Korean band BTS is currently in the US as part of their first world tour after a four year hiatus. Their fans, known as ARMY, are extremely loyal, and the concerts are attracting hundreds of thousands of attendees, including Susan Schmidt, Portfolio Manager at Exchange Capital Resources, who just attended two of their performances in Chicago. Susan, welcome.

**Susan Schmidt** (4:25)
Thank you.

**Kimberly Adams** (4:26)
Susan, how long have you been ARMY?

**Susan Schmidt** (4:28)
Several years, and one would say, I'm late to the ARMY crowd. So we have devoted followers of BTS within ARMY, and fans that have been there since their launch in 2013 So a large influx of ARMY fans joined between 2015 and 2020

**Kimberly Adams** (4:44)
So taking off your fan cap for a minute and putting your economist hat on, what kind of economic impact is this tour having in the cities, at least here in the US, where BTS is performing?