""Trump has always understood the political power of rising stock markets. Strong equities project confidence, momentum and economic success. "But bond markets are beginning to overpower the stock market narrative. "This is now the real risk.""
""That confidence is now breaking down. Oil prices are rising sharply again, and inflation expectations are moving higher. "Bond investors are demanding greater compensation to hold long-dated government debt. "Markets are beginning to price a structurally more inflationary world.""
""Investors, for years, had little alternative to stocks because sovereign yields were artificially suppressed and cash generated almost nothing. "That environment supported extreme valuations across tech and growth assets. "Now inves""
US Treasury yields have climbed sharply, with the 10-year yield reaching 4.631% and the 30-year yield near 5.16%, while the 2-year yield rose above 4.1%. Investors are selling government debt as oil prices surge past $110 a barrel amid intensifying Iran-related conflict and escalation near the Strait of Hormuz, a key global supply corridor. The bond market is increasingly linking geopolitics, inflation expectations, and equity risk. Expectations of fading inflation and upcoming rate cuts have weakened, and bond investors now demand higher compensation for holding long-dated government debt. Markets are beginning to price a more structurally inflationary environment, undermining prior support for high valuations in tech and growth assets.
#us-treasury-yields #inflation-expectations #oil-and-geopolitics #equity-market-risk #rate-cut-outlook
Read at London Business News | Londonlovesbusiness.com
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