Bonds aren't 'out of the woods yet' -- and that could mean trouble for stocks

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Bonds aren't 'out of the woods yet' -- and that could mean trouble for stocks
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Sofi's head of investment strategy thinks a hot inflation report could spook bond investors and halt the fixed income rally.

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"I don't think bonds are completely out of the woods yet," Young said. "We also haven't seen very much weak economic data...At this point there hasn't been a good reason for yields to come down and stay down."

Higher inflation could prompt the Fed to hike interest rates once more. Recent research from BlackRock shows the 10-year Treasury yield has closely tracked the Fed funds rate during this and other hiking cycles.recently. So a hot inflation report that sends yields higher would potentially not bode well for equities, which haven't reacted well to instability in the bond market.

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