The sharp rise in US government bond yields this month is being shaken by stocks, suppressing popular technology stocks and some other sectors, and prompting a deeper reassessment of the threat posed by rising interest rates.
At present, many investors remain optimistic, because the reasons for the bond contraction are mostly positive. It was near historical lows for most of last year. In recent months, U.S. Treasury yields have climbed, and investors’ expectations of a strong economic rebound have also risen. This is partly due to more debt financing. Promoted by government spending.
The rise in yields caused by falling bond prices usually reflects investor expectations for faster growth and the accompanying inflation, which erodes the purchasing power of fixed payments on bonds and may eventually lead to the Federal Reserve raising short-term interest rates. Increasing government borrowing can also increase yields by increasing the supply of bonds. Although many investors are paying attention to inflation data, analysts and portfolio managers said that so far, there is no reason to believe that the price level will rise enough to prompt the Fed to raise interest rates as soon as possible, which may be the biggest risk facing major stocks. index.
Brad McMillan, chief investment officer of the Federal Financial Network, an investment adviser and brokerage firm, said: “The market is mainly saying,̵
As of Friday, the benchmark 10-year U.S. Treasury bill’s yield was 1.344%, higher than the 1.157% five trading days ago, and it was about 0.9% at the beginning of the year.