{"id":48573,"date":"2023-08-15T07:46:41","date_gmt":"2023-08-15T11:46:41","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/bond-yields-are-rising-and-the-stock-market-is-dropping\/"},"modified":"2023-08-15T07:46:44","modified_gmt":"2023-08-15T11:46:44","slug":"bond-yields-are-rising-and-the-stock-market-is-dropping","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=48573","title":{"rendered":"Bond Yields Are Rising\u2014and the Stock Market Is Dropping"},"content":{"rendered":"
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Rising expectations that the Federal Reserve will keep interest rates higher for longer to fight inflation has pushed the yield of the 10-year U.S. Treasury, the benchmark against which mortgage rates are set, to its highest level in 2023.<\/p>\n

The yield on the 10-year Treasury rose above 4.23% on Tuesday, its highest level since last November and up from 4.02% last Thursday\u2014before the latest consumer price index (CPI) data showed that inflation snapped a streak of declines.\u00a0<\/p>\n

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\u201cBorrowing costs are still getting more restrictive in real terms,\u201d said Henry Allen, an analyst at Deutsche Bank. \u201cThe main factor driving yields higher was the prospect that the Fed would keep policy in restrictive territory for longer than previously anticipated\u2026we\u2019re continuing to see markets reappraise the policy path in a more hawkish direction.\u201d<\/p>\n

Rising to 3.2% year over year, the latest CPI print stoked concerns that the period of steady slowdowns in price-growth was over, while inflation remains well above the Federal Reserve\u2019s 2% target. The period since has been marked by Treasury yields marching higher across the curve and increased bets among traders of a more aggressive Fed.<\/p>\n

Indeed, futures markets are pricing in a far greater chance that the Fed keeps rates at the current 5.25%-5.5% level for longer or even increases borrowing costs from here.<\/p>\n

The odds that rates remain at the current, generationally high level by the January, March, May, or June 2024 meetings of the Fed\u2019s monetary policy committee have risen from a week ago, according to the CME FedWatch Tool. The same market pricing metric also reveals chances of another quarter-point hike by one of those meetings have near doubled since last week, with a 25% chance that the upper bound of rates will rise to 5.75% by January, up from a 16% chance.<\/p>\n

For now, elevated Treasury yields are adding weight to stocks and damping risk sentiment among investors as the
\n Dow Jones Industrial Average
\n and
\n S&P 500
\n head for losses. But if expectations of higher rates for longer are borne out, there will be mortgages under pressure, too.<\/p>\n

Write to Jack Denton at jack.denton@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Rising expectations that the Federal Reserve will keep interest rates higher for longer to fight inflation has pushed the yield of the 10-year U.S. Treasury, the benchmark against which mortgage rates are set, to its highest level in 2023. The yield on the 10-year Treasury rose above 4.23% on Tuesday, its highest level since last […]<\/p>\n","protected":false},"author":1,"featured_media":48574,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-48573","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBond Yields Are Rising\u2014and the Stock Market Is Dropping | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Rising expectations that the Federal Reserve will keep interest rates higher for longer to fight inflation has pushed the yield of the 10-year U.S.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=48573\" \/>\n<meta property=\"og:locale\" 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