10-Year Treasury Yield moved up to 4.55% today, highest since Oct 2007. Real 10-Year Yield (adjusted for expected inflation) of 2.18% is the highest since Jan 2009. Good times for new bond investors, bad times for existing bond investors.
from Deutsche Bank — 10-year Treasury yields have averaged 4.5% in 233 years of data we’re back to normal baybee
Fitch Ratings’ decision to strip the U.S. of its triple-A credit rating last week was widely dismissed as meaningless. After all, Standard & Poor’s had done the same back in 2011 and bond yields declined—implying more, not less, appetite for Treasury debt. This time, though, bond yields rose. That suggests Fitch’s action deserves our attention,
Emerging Markets (EMs) are highly fragile. This is due to the fact that usually when there’s a recession, capital flees, the currency melts, inflation increases and interest rates explode, choking businesses, and making the situation far worse than it would otherwise be. To fight this, the local Central Bank often aggressively raises rates, which defends