The Bond Yield is a measure of the interest rate that the government is obligated to pay to investors who hold its bonds. Government bonds are essentially loans provided by bondholders to the government, where the bondholder lends a specific amount of money, such as €100, for a predetermined period, such as 10 years. In return, the government pays an annual interest rate on the bond throughout its duration. Upon reaching maturity, the government is required to repay the initial loan amount.
Bond yields serve as an indicator of the economic condition of a given country. Higher bond yields indicate that the government must offer a higher interest rate to attract investors and secure loans. (The bond yield referred to in the video was accurate as of June 2023, but is subject to constant change). Conversely, lower bond yields signify favorable economic circumstances, as the government can obtain loans at lower interest rates. A comparison of the yield payable on global 10-year bonds can provide insights into the relative economic performance across different countries.