Why you should care about the global bond sell-off

Summary

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Marketplace Morning Report – May 20, 2026

Episode Title: Why you should care about the global bond sell-off
Host: Sabri Benishore
Main Guests: Gil Laba (Chief Fixed Income Strategist, Janney Montgomery Scott), Gil Luria (Managing Director, DA Davidson)

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Episode Overview

This episode centers on two major stories in under ten minutes:

• The global bond market sell-off, why it’s happening, and why everyday people should care.
• Google’s surprising strength in AI-driven search and cloud computing amid competition.

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Key Discussion Points and Insights

1. The Global Bond Sell-Off: What’s Happening and Why It Matters

(01:31 – 04:33)

• Issue: Investors are selling off bonds globally, driving up yields (the returns investors demand to hold bonds). The U.S. 30-year bond yield hit 5.2%—the highest since 2007.
• Why it matters:
  • Many Americans hold bonds directly or indirectly (401ks, retirement funds).
  • Rising yields mean falling prices in the short run—reducing the value of current bond holdings.
  • Higher rates raise borrowing costs for consumers and businesses, leading to more expensive mortgages and business loans.
• Causes:
  • Unexpected global conflict has pushed up oil prices, contributing to inflation.
  • Inflation causes bond prices to fall and yields to rise, as investors demand higher returns to compensate.

Notable Quotes & Timestamps

• Gil Laba (02:18):
  “Many individuals in 401ks and retirement accounts have exposure to the bond markets...when interest rates go up, the forward looking returns...is going to go up. But in the short term, it also means that prices have fallen, and so that can be a cause of some distress.”
• Gil Laba (03:07):
  “We at Janney went into 2026 modestly optimistic on the bond markets, but we...didn’t anticipate a conflict that would cause oil prices around the world to rise. And higher oil prices are a source of inflation generally...When inflation is going up, bonds sell off and interest rates tend to rise.”

2. Mortgage Rate Impacts & Homebuyer Advice

(03:38 – 04:27)

• Issue: 30-year fixed mortgage rates have reached 6.75%.
• Homebuyer situation: Home prices and rates are both high; about a third of the rise in housing costs is due to rising mortgage rates.
• Advice: Not much optimism; it's a tough time to buy, but buyers may have some negotiating power with homebuilders over prices.

Notable Quote

• Gil Laba (03:51):
  “Over the course of the last few years, home prices have risen and mortgage rates have risen. Roughly one third of the higher cost of housing is related to mortgage rates. So it’s a challenging time to be buying a home...it’s possible that people looking to buy a home might have a little more leverage over new homebuilders and try to negotiate lower prices.”

3. Brief News Update: IRS and Legal Settlement

(04:33 – 05:05)

• News Bite: The Justice Department will drop any claims against the President and family regarding pending tax matters, in exchange for President Trump dropping his $10 billion lawsuit against the IRS.

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4. Google’s AI-Driven Search and Cloud Dominance

(06:29 – 09:23)

• Performance: Google’s search engine revenues grew 19% in Q1, defying concerns about AI competitors. Use of Google’s Gemini AI search doubled to 900 million queries per month—matching ChatGPT.
• Strategy: Google leaned into self-disruption, reimagining search with AI interaction rather than resisting it.
• Cloud Growth: Google Cloud is now outpacing Amazon AWS and Microsoft Azure, aided by Google's investments in AI chips and partnerships, such as with Anthropic.

Notable Quotes & Timestamps

• Gil Luria (07:20):
  “When they changed their mind and said, to your point, no, we are going to disrupt ourselves. We are going to push consumers to interact with AI instead of interacting with traditional search. That's when they started being successful...Consumers get what they want. And when consumers get what they want from advertising, that means the advertisers are willing to pay more for that.”
• Gil Luria (08:38):
  “They have chips to offer business customers, they have models to offer consumers and business customers. And they're a big investor and supporter of Anthropic, which means they're handling a lot of that spike in demand for Anthropic. So all that's coming together through Google Cloud, which is why it's now the fastest growing cloud, faster than Amazon Web Services, and even faster than Microsoft Azure.”

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Memorable Moments

• Personal Finance Caution: Gil Laba’s frank advice to potential homebuyers about the difficulty of the current market, but also the incremental ability to negotiate with homebuilders (03:51–04:27).
• Corporate Self-Disruption: Gil Luria’s emphasis on Google’s willingness to “disrupt ourselves” as the turning point for success in the AI search arms race (07:20).

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Important Segment Timestamps

• 01:31: Segment begins—global bond sell-off explained.
• 02:18 – 03:38: Why bond yields matter, and the impact on consumers.
• 03:38 – 04:27: Discussion of mortgage rates and homebuying environment.
• 04:33 – 05:05: Brief on IRS/Trump legal settlement.
• 06:29: Transition to Google’s AI and search fortunes.
• 07:20 – 08:31: How Google regained AI momentum and attracted advertisers.
• 08:38 – 09:17: Google Cloud’s rapid growth and future prospects.

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Overall Tone and Insights

• The conversations are clear, concise, and focus on practical economic impacts for ordinary people—typical of Marketplace’s style.
• Guests provide expert, plainspoken analysis that connects global finance trends (like bond yields) to everyday finance concerns (like mortgages and retirement funds).
• Tech coverage frames AI disruption as a matter of strategic adaptability, crediting Google’s success to bravely “disrupting itself” for future survival.

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This episode distills complex global economic and tech stories into accessible, actionable information for listeners who want to understand how major financial shifts affect their lives and the business world.

Transcript

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[Sabri Benishore]

why Investors Are Souring on Bonds and why We Should Care From Marketplace I'm Sabree Ben ashore in New York. There has been a global bond sell off over the past couple weeks and when investors sour on bonds, it means they need a bigger payoff on those bonds to be convinced to come back. So that payoff, also known as the yield, rises. The Yield on the 30 year bond yesterday hit 5.2%, the highest rate since 2007. Ten year yields are about as high as they've been in more than a year. Rising yields can cause problems in the economy. Joining us to talk about it is Gila. He's chief fixed Income strategist at Janie Montgomery Scott.

[Gil Laba]

Good morning Sabri.

[Sabri Benishore]

Why do we care what yields on 10 year bonds? 30 year bonds are doing?

[Gil Laba]

Well, for one thing, many individual in 401ks and retirement accounts have exposure to the bond markets. And when interest rates go up as they have been over the course of the last few weeks, the forward looking returns, the yield you get on a portfolio of bonds in your retirement account is going to go up. But in the short term, it also means that prices have fallen, and so that can be a cause of some distress. The other place we care a lot is in how much we pay as consumers and businesses to borrow money. As interest rates go up, mortgage rates go up. Things like borrowing for loans to expand businesses, they also go up as well in cost.

[Sabri Benishore]

So that said, yields are rising because investors have been dumping bonds. Why are they doing that?

[Gil Laba]

All sorts of reasons. So I'll say we as a group at Janney went into 2026 modestly optimistic on the bond markets, but we and most other investors and strategists didn't anticipate a conflict that would cause oil prices around the world to rise. And higher. Oil prices are a source of inflation generally, although it's not a one to one relationship. When inflation is going up, bonds sell off and interest rates tend to rise.

[Sabri Benishore]

Mortgage rates, which you know are based on bond yields, have reached 6.75% for a 30 year fixed mortgage. What would you tell someone who is looking to buy a home?

[Gil Laba]

Unfortunately, I don't have a lot of good advice there. Over the course of the last few years, home prices have risen and mortgage rates have risen. Roughly one third of the higher cost of housing is related to mortgage rates. So it's a challenging time to be buying a home. Absolutely no doubt about that. You know, one thing that we're seeing is that home builders are either facing lower volumes or narrower margins. So it's possible that people looking to buy a home might have a little bit more leverage over new homebuilders and try to negotiate lower prices.

[Sabri Benishore]

GI Laba is chief Fixed Income strategist at Janney Montgomery Scott. Thank you so much.

[Gil Laba]

Thank you.

[Sabri Benishore]

The Justice Department has agreed to drop any claims against the President and his family on current, currently pending tax matters forever. This is in exchange for President Trump dropping his $10 billion lawsuit against the IRS.

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[Sabri Benishore]

Despite worries that AI rivals might swallow up its business, Google's search engine continues to reign supreme. Search revenue grew 19% in the first quarter of and on Tuesday, Google announced that searches using its Gemini AI had more than doubled to 900 million per month, matching ChatGPT's reported numbers. So how did Google do it? Gil Luria joins us to talk about that. He's managing director and head of technology research at the financial services firm DA Davidson. Hi, Gil. Thanks for coming on.

[Gil Luria]

Thanks for having me.

[Sabri Benishore]

Google was a little late to the AI game and people were afraid it was going to got their search results. But then Google was like, you know, if someone's going to disrupt us, it should be us. And things have worked out. Search revenue has actually increased dramatically. What is the takeaway from that?

[Gil Luria]

When they changed their mind and said, to your point, no, we are going to disrupt ourselves. We are going to push consumers to interact with AI instead of interacting with traditional search. That's when they started being successful. And it's easy to understand we rarely do Google searches these days because that's not as good as interaction as the AI mode that Google presents us as a chat that OpenAI gives us, where we're actually having an interaction where we can form complicated thoughts and we don't have to spell everything exactly right. And on the other side, these AI tools are looking at a website in a more comprehensive way. They're not just looking for keywords. They're trying to figure out what it is that the company does, how it does it, how it positions itself, what products are important. So it's that much better understanding of the website with a much better understanding in the consumer. And it's putting those together. And what happens when you do that is consumers get what they want. And when consumers get what they want from advertising, that means the advertisers are willing to pay more for that.

[Sabri Benishore]

Yeah. And meanwhile, even though we think of Google as like an ad search company, their. Their cloud services business has been taking

[Gil Luria]

off at the same time accelerating at a tremendous rate. This is a business that just a few quarters ago is growing maybe 20, 30%. And that is because all these things are coming together for them. They have chips to offer business customers, they have models to offer consumers and business customers. And they're a big investor and supporter of Anthropic, which means they're handling a lot of that spike in demand for Anthropic. So all that's coming together through Google Cloud, which is why it's now the fastest growing cloud, faster than Amazon Web Services, and even faster than Microsoft Azure.

[Sabri Benishore]

Gil Luria, Managing director and head of Technology Research at DA Davidson. Gil, thank you so much.

[Gil Luria]

Thank you.

[Sabri Benishore]

In New York, I'm Sabri Benishore with the Marketplace Morning Report from APM American Public Media.

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I'm Reema Grace, host of the Marketplace podcast. This is uncomfortable. And this week on the show we talk to Canadians boycotting the United States. We've had economic war declared on us, so it just feels like I am fighting for Canada as a soldier every single day. Plus, a financial therapist explains why aligning our spending with our values and feel so emotionally powerful.

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