Bob Parker, senior advisor at the International Capital Markets Association, spoke to CNBC about why a U.S. 10-year Treasury yield of 5.5% could trigger a 5% to 10% stock market correction.
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It’s gonna take more than 5.5%…this Market potential has double digit % returns
Agreed , we had zero interest rates for 7 years and we are spending trillions on AI , until oil pulls back 5.20 to 5.5 is the new norm! Profit from AI is driving the market now !
He states that a threshold would be at 5.5 ( 10 yr) – but this seems a tadpole low, as already at 5.2. Looking at the long term chart for 10 yr bonds dating back to early ’80’s- a more strategic level is probably around 6.4- 6.7. But it’s multi-factorial, of course, so probably still need an unexpected black Swan factor or incident to be the initial axcellerant.
5.5 percent yield when real inflation is at double digits. No thanks.
The yield isn’t high because US debt is attractive. The yield is high hecause the US is slowly going broke.