Global bond yields reach multi-year highs as borrowing costs rise for households and businesses
Global bond yields have risen sharply in recent weeks, reaching their highest levels since 2008. The 10-year US Treasury yield reached its highest level in 20 months and the loftiest level of President Trump’s second term in office.
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These yields are rising as investors sell bonds to account for inflation concerns, the prospect of a central bank interest rate hike, and concerns over government deficits. Bond yields help set interest rates across the economy, and a steep rise can increase the cost of mortgages, auto loans, and other borrowing for consumers and businesses. The rise in yields can also put pressure on the stock market, particularly high-growth tech stocks that rely on debt to fund infrastructure. As yields on trustworthy government bonds rise, investors may be pulled away from more volatile investments like stocks. Investors are currently assessing the impact of higher rates on economic valuation levels.
Sources
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Rising bond yields put pressure on the stocks powering the market
Yahoo Finance UK
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This could be the 10-year Treasury’s tipping point into the danger zone
marketwatch.com