5% Treasury yields may disrupt markets with falling stocks and rising mortgage rates.
By Saqib Iqbal Ahmed
9:59 AM UTC – October 20, 2023
Relentless Selling of U.S. Government Bonds Sends Treasury Yields Soaring
The yield on the benchmark 10-year Treasury bond briefly reached 5% on Thursday, its highest level since 2007. This surge in yields has had far-reaching effects, impacting stocks, real estate, and more. The S&P 500 has dropped 7% from its yearly highs as investors flock to the guaranteed yields of government debt. Mortgage rates have also risen to over 20-year highs, putting pressure on real estate prices.
Wide-Ranging Effects on Markets
- Investors are reevaluating risky assets as higher interest rates persist.
- Elon Musk warns that high interest rates could dampen electric-vehicle demand.
- High-dividend paying stocks in sectors like utilities and real estate are among the hardest hit.
- The U.S. dollar has strengthened, tightening financial conditions and impacting exporters.
- The housing market is suffering, with existing home sales dropping to a 13-year low.
- Credit market spreads have widened, increasing funding costs for borrowers.
- Volatility has increased in both stocks and bonds as expectations for Fed policy shift.
These developments have raised concerns among investors, who are closely monitoring the situation. The Federal Reserve’s stance on interest rates and the U.S. government’s fiscal concerns are key factors driving this market turbulence.
Reporting by Saqib Iqbal Ahmed; Writing by Ira Iosebashvili; Editing by Stephen Coates
Sidney Powell pleads guilty in the Georgia Election Case, the U.S. Navy shoots down a missile from Yemen’s Houthi Rebels and the Jim Jordan for Speaker push continues.
This week, the world witnessed a remarkable operation as nearly 300 trapped American citizens were safely flown out of Israel to Florida amid the Israel-Hamas war.
Radical leftist Hamas supporters gather at the Capitol led by Representatives Rashida Tlaib and Cori Bush.
As Iranian-backed Hamas launches attacks on Israel, many believe these actions have the fingerprints of another ally, China.
Elon Musk said the social media platform X will soon launch two new tiers of premium subscriptions.
Bitcoin jumped on Friday above $30,000 for first time since July, taking gains for the week past 10%.
Meta and TikTok have been given a week to provide details on measures taken to counter the spread of terrorist, violent content and hate speech on their platforms.
Netflix increased subscription prices for some streaming plans as it shattered expectations for new customers.
rnrn
How has the relentless selling of U.S. government bonds impacted various markets?
Saqib Iqbal Ahmed, October 20, 2023
Relentless Selling of U.S. Government Bonds Sends Treasury Yields Soaring
The yield on the benchmark 10-year Treasury bond briefly reached 5% on Thursday, its highest level since 2007. This surge in yields has had far-reaching effects, impacting stocks, real estate, and more. The S&P 500 has dropped 7% from its yearly highs as investors flock to the guaranteed yields of government debt. Mortgage rates have also risen to over 20-year highs, putting pressure on real estate prices.
Wide-Ranging Effects on Markets
- Investors are reevaluating risky assets as higher interest rates persist.
- Elon Musk warns that high interest rates could dampen electric-vehicle demand.
- High-dividend paying stocks in sectors like utilities and real estate are among the hardest hit.
- The U.S. dollar has strengthened, tightening financial conditions and impacting exporters.
- The housing market is suffering, with existing home sales dropping to a 13-year low.
- Credit market spreads have widened, increasing funding costs for borrowers.
- Volatility has increased in both stocks and bonds as expectations for Fed policy shift.
These developments have raised concerns among investors, who are closely monitoring the situation. The Federal Reserve’s stance on interest rates and the U.S. government’s fiscal concerns are key factors driving this market turbulence.
Reporting by Saqib Iqbal Ahmed; Writing by Saqib Iqbal Ahmed; Editing by
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
