10-year Treasury yield hits 3% for first time since 2014

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Government bonds also fell across the global markets.

In my recent blog Investors Must Watch Bond Market for Signs of Economic Strain: "Investors could do well watching the bond market as the idea of tax cuts and more spending in an economy that has full employment and a large budget deficit is an interesting challenge to the conventional economic thinking".

"2018 may present a different picture...." The yield on the benchmark bond - which helps to set prices for debt instruments all over the world - inched past 3% on Tuesday, a level that many market players deem risky for investments and the economy.

Investment-grade and high-yield corporate bonds are also now negative on the year, and the rise in Treasury yields appeared to be rippling through emerging markets, as investors eye shifting money into safer USA debt.

What do you think is happening in the bond market?

Inflation concerns due to rising commodity prices, along with worries about growing Treasury supply, have stoked selling in Treasuries since late last week, analysts said.

Emerging market investors are taking note, too. So to offset a current rise in interest rates investors demand more future money.

To support this, he points to the fact that "the difference between short- and longer-term rates" has narrowed.

Wednesday marked the first time the 10 year Treasury yield has hit 3% since January 2nd 2014, with 3.05% (the highs at that time) the next target for the market. "That has narrowed the gap between the two yields...."

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However, some others argue that the U.S. Federal Reserve still has lots of room to hike rates, without hurting markets, as they had been so low following the 2008 financial crash.

Rising interest rates pose several problems for stocks in particular.

For example, former Fed Chair Janet Yellen has asserted that the US economy will be a 1 percent real rate economy in the medium term, and the day that is the case then a 3 percent neutral rate will come immediately in play.

The greenback had risen without pause through much of the past week as US-China trade conflict fears receded and allowed the market to turn its attention back to dollar-supportive fundamentals, notably the surge by US yields.

He explained: "This path towards higher yields can be stopped in its tracks if we see a meaningful sell-off in risk assets (such as the early February equity rout), in the absence of which we would expect yields to continue to creep higher". Auto loans, home mortgages, and other loans are aligned with the yardstick 10-year yield. The five-year yield increased from 28 basis points to 53 basis points, and the ten-year yield rose from 51 basis points to 76 basis points.

The Dow and the Nasdaq both fell 1.7 percent. Anything with an interest rate is going to be affected by this, even if it's indirect. "Stocks also have performed well even when economic momentum has faded, if inflation also moderates".

Today, the news of 3% yields on 10-year notes, which was the underlying catalyst for today's dramatically lower equities pricing, provided bullish tailwinds which helped gold prices break their three-day losing streak.

Federal Reserve actions have very little influence on the yield on TIPS.