What happens to yields as more bonds are issued?

When more bonds are issued, it typically leads to higher yields. This relationship is based on the principles of supply and demand in the bond market. As supply increases due to the issuance of more bonds, investors may demand a higher yield to compensate for the increased supply. This is because, with more bonds available, the perceived scarcity decreases, which can lead to a drop in bond prices. Since bond yields and prices move inversely, an increase in supply generally causes bond prices to fall, thereby increasing yields.

It's also important to understand that higher yields make bonds more attractive to investors, who might be looking for better returns on their investments. Thus, as more bonds enter the market and competition for investor capital increases, issuers must offer higher yields to entice buyers, leading to the observed trend of rising yields with increased bond issuance.