Why Treasury yields keep rising, causing pain for stock-market investors

  • 📰 MarketWatch
  • ⏱ Reading Time:
  • 55 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 25%
  • Publisher: 97%

Nigeria News News

Nigeria Nigeria Latest News,Nigeria Nigeria Headlines

A slow-motion breakout on long-dated Treasury yields is undermining investor confidence.

Long-dated Treasury yields reached their highest closing levels in well over a decade on Thursday, undermining investors’ confidence, injecting uncertainty in the stock market, and threatening the U.S. housing market.

Nicholas Colas, co-founder of DataTrek Research, said “the root cause” behind the U.S. government-debt market’s moves is higher real yields and that the 10-year Treasury yield could “easily reach” 4.5%-5%. Real yields reflect the difference between the expected levels of inflation and nominal Treasury rates.“Higher inflation expectations are not the reason 10-year yields are breaking out; real rates are the problem,” Colas said in a note on Thursday.

Meanwhile, 10- and 30-year real yields — as measured by rates on Treasury inflation-protected securities, or TIPS — provide a look at how the underlying economy is performing after subtracting inflation. Higher real yields also indicate that the inflation-adjusted cost of borrowing is going up. As of 3 p.m. Eastern time on Thursday, the 10-year TIPS yield was at 1.979% and the 30-year TIPS yield was at 2.102%, according to Tradeweb.

Real long-term rates of 2%-3%, or levels seen in 2006-2007, could also reduce consumption and investment by increasing the cost of consumer debt and corporate cost of capital.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 3. in NG

Nigeria Nigeria Latest News, Nigeria Nigeria Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stock Market Today: Dow lower as Treasury yields rise after retail sales surprise By Investing.comStock Market Today: Dow lower as Treasury yields rise after retail sales surprise
Source: Investingcom - 🏆 450. / 53 Read more »