US 30Y Treasury Yield hits highest level since 2007. Bond market screaming something big?
US 30 year Treasury yield is now at its highest level since 2007, pre financial crisis era.
That means investors are demanding much higher returns to lend money to the US government for 30 years. Higher yields usually mean:
-Higher borrowing costs globally
-Pressure on stock market valuations
-Stronger dollar
-FII outflows from emerging markets like India
-More pain for rate sensitive sectors
Interesting part is, this is happening while markets are still near highs. Bond market and equity market seem to be telling two different stories right now.
If US yields keep rising:
Nasdaq growth stocks could get hit
-Indian IT and banks may see volatility
-RBI rate cut expectations may get delayed
-Gold could remain under pressure
2007 vibes or just normal repricing after years of cheap money?