These numbers are bad news if you’re trying to buy or refinance a house
Bond yields and prices move in opposite directions, so the big increase is a sign that fixed-income investors are growing more nervous.
Although that’s still historically low, the massive jump in such a short period of time is what’s spooking Wall Street. Some worry that the Fed’s rapid moves will eventually lead to a recession, while others fear that the central bank is still behind the curve in its inflation fight and will have to resort to even more big increases throughout the year to catch up.
Still, one expert says that the dramatic spike in yields may soon come to an end.
“Treasury yields jumped at a pace and magnitude rarely seen historically,” Saira Malik, chief investment officer of Nuveen, said in a report Monday.
“A similar rate shock looks unlikely in the near term for a number of reasons: Much of the bad news (Fed hikes, inflation) has already been priced in,” Malik said, adding that, “bonds tend to be resilient following selloffs and during Fed hiking periods.”
However, the Fed is also likely to soon start unwinding its massive bond portfolio, which could put more upward pressure on bond yields.
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