News Digest:

Fears of more interest rate hikes by the Federal Reserve is pushing investors towards the bond market amidst the expectations of a spike in their yields. This could potentially result in the equity and fixed income markets taking a further blow in the upcoming weeks, says a report.

The two-year US Treasury yield, considered the bellwether for interest rate movements, is hovering around 3.79%. These levels are close to the peaks of November 2007 and could be seen as a response to the expectations of how the Fed rates could move during the rest of 2022 as the US Treasury attempts to tame inflation.

Takeaway:

Some fund managers believe that the upward move would continue and the bellwether yields could top 4% to record levels over the past 15 years. Rising bond yields have added pressure to the equity market in 2022, especially the growth and technology stocks that see a real threat of eroding future earnings potential and spiking up cost of capital.

End Notes

Source: https://www.investing.com/news/economy/analysismore-damage-to-be-done-as-sizzling-inflation-seen-lifting-treasury-yields-2892285