From the point of view of interest rate increase of national debt, because national debt itself is an interest rate product, after the country raises the benchmark interest rate, the income of bank deposits increases, and the liquidity of bank deposits is convenient and flexible, which does not rule out the return of some funds to the banking system. In this way, the national debt market is facing the pressure of capital return. After the national benchmark interest rate is raised, the financing cost of banks and other institutions increases, which objectively requires the national debt to increase its yield. However, the interest rate of the existing national debt market is relatively low, and it faces greater selling pressure. Therefore, the impact of raising interest rates on the national debt market will directly lead to a decline in the price of the national debt market and an increase in the yield. This should be inevitable in the short term.
Raising interest rates is a purposeful behavior of the central bank or ordinary commercial banks to raise one or part of the existing interest rates, usually to achieve a specific goal. In a narrow sense, raising interest rates is the behavior of the central bank of a country or region to raise interest rates, which usually refers to raising deposit interest and loan interest, thus increasing the borrowing cost of commercial banks and other financial institutions to the central bank, and then forcing the market interest rate to increase. The purpose of raising interest rates includes reducing money supply, curbing consumption, curbing inflation, encouraging private deposits, slowing down or curbing market speculation and so on. Raising interest rates can also be used as an indirect means to increase the value of domestic or local currencies against other currencies. Generally speaking, the direct purpose of raising interest rates is to force commercial banks to borrow from the central bank at a more expensive cost, and then to force the interbank lending interest to increase, thus increasing the short-term financing cost of the entire financial market and curbing malicious speculation.
Raising interest rates is not only an economic behavior, but also the product of multiple political and social factors. Sometimes it is probably not for economic purposes, but under pressure. For example, a country or region will cut interest rates when its currency continues to appreciate, thus increasing the money supply, which can achieve the purpose of restraining the appreciation of the currency, but this country or region will face new pressure of rising prices and have to raise interest rates to stabilize prices.