Would a 5% 10Y Treasury yield really be a tipping point?
Today’s further, oil-price-driven, sell-off in global sovereign bonds has seen the 10-year US Treasury yield rise to almost 5%, which is seen by some as a threshold above which financial markets might go into meltdown. While we aren’t convinced that 5% is that ‘magic’ number, higher Treasury yields would certainly pose a risk to the sustainability of the US’ public finances as well as threaten equities.
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