Market Extra: Rising Treasury yields are upsetting financial markets. Here’s why.

by | Oct 3, 2023 | Stock Market

Treasury yields remained on a seemingly unrelenting rise on Tuesday that continued to rattle investors across global financial markets. The longest-dated yield in the roughly $25 trillion Treasury market hurtled toward 5% on Tuesday, on pace to join its 10-year counterpart at the highest levels since the period before the 2007-2009 recession. The 30-year Treasury rate
surpassed 4.9% in New York trading, while the benchmark 10-year yield
rose to almost 4.8% — leaving both headed for levels not seen since the second half of 2007 as the result of an aggressive selloff in long-dated government debt.

Rising long-term Treasury yields are generally the bond market’s way of signaling a brighter economic outlook ahead. However, this time around, there’s a bit more going on, strategists said. The climb in yields also reflects investors’ demand for more compensation to hold Treasurys to maturity, given all the uncertainties that could emerge over the life of those securities, strategists said.The continued bond-market selloff is burning existing holders of government debt and deepening the stock-market selloff. The Dow Jones Industrial Average
wiped out its 2023 gain on Tuesday as yields climbed, while the S&P 500

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