High bond yields are detrimental to the stock markets but will cause USD to appreciate as the risk-free rate affects other interest rates.
https://sg-stock.blogspot.sg/2018/02/stock-markets-are-falling-like-crazy.html
The USA had increased its national debt by about USD$10T in the past decade (2008) and higher interest rates would increase its interest repayment burden. This is the primary reason for the stock market fall. The stock market will see more volatilities from now because FED has to increase interest rates gradually.
3 comments:
The stock market has to fall more than 20% from its peak for the FED to reverse its course of interest rate hiking.
The stock market will have the problem keeping its bullish trajectory until the FED reverses its rate hiking.
I think FED's target for 10-year bond yield is 3.5%. Therefore, FED will continue to hike interest rate until it is approaching 3.5%.
https://www.channelnewsasia.com/news/business/fed-likely-to-continue-raising-rates--kaplan-9941514
FED is likely to continue raising rates.
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