At What Level Do Bond Yields Cause Stock Problems?

How high do bond yields have to rise to cause the equity market to crumble? It had been said 3% was the magic number but that is looking very near

David Brenchley 21 February, 2018 | 8:46AM
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New Federal Reserve chair Jerome Powell bonds fixed income stock market yield income crash

“US equity valuations are sustainable as long as the US 10-year yield does not go above 3%,” the Schroders multi-asset team warned four short weeks ago.

Then, the yield was at 2.65%. It’s continued to advance since. Last week the number peaked above 2.9%, a well-publicised four-year high, having ended 2017 at 2.4%. That caused market commentators to hastily re-think their view the magic 3%.

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David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk