The 10-year Treasury yield has hit the 3% level — here’s what that means


The 10-year U.S. Treasury yield has broken through the “psychologically important” level of 3 percent, leaving analysts contemplating what it could mean the future of asset markets and, more importantly, the global economy.

The yield on the benchmark bond — which helps to set prices for debt instruments all over the world — inched past 3 percent Tuesday, a level that many market players deem dangerous for investments and the economy.

With yields rising — which move inversely to a bond’s price —market participants are expecting higher interest rates from central banks. And as a result of these higher interest rates, companies will have higher costs when borrowing money and will have less room to increase salaries, to invest, and to give returns to shareholders — making equities less attractive. As the 10-year note is used to set mortgage rates, then it can also reduce people’s ability to spend.

Source link

Products You May Like

Articles You May Like

Student loan debt is a hurdle for many would-be mothers
Investors find value in emerging market debt
Tesla hires new chief financial officer for China
Victoria’s Secret might be ‘broken’ as L Brands slashes its outlook
Wall Street banks are firing traders despite strong performance

Leave a Reply

Your email address will not be published. Required fields are marked *