As 5% US Treasury yields lose shock value, investors start worrying about 6%

…has not lasted long enough yet to properly test that theory. But it has always been a psychological marker rather than an automatic tripwire, according to BlueBay Asset Management's head of market strategy, Mike Bell. " People think of it as if there's a magic number for Treasury yields at which it becomes a problem, (but) it's a relative number, not an absolute number ," Bell explained. What matters is how Treasury yields compare with other key investment metrics, particularly the earnings yield on stocks. Bell says that relationship is now approaching an inflection point,…

…remains some way off for now - the 12-month average is currently around 4.34% - but Jackson said he was already dialling back on stocks and switching some money into government bonds to cash in on the juicy yields. " If Treasury yields keep rising then there is a risk that the stock market is lower in 12 months' time ," he said. EMERGING QUESTIONS Emerging markets, which have enjoyed something of a hot streak in recent years, are often among the first casualties when US yields surge. Higher Treasury returns tend to strengthen the…

…shows last week saw the biggest exodus from EM bond funds in months, with billions also withdrawn from equity funds. Issuance of emerging-market sovereign debt has also been notably lighter than usual this month. " It's not an optimal picture for EM ," said Alison Shimada, Head of Total Emerging Markets Equity, Allspring Global Investments, although she stressed that for now nothing was going "horribly wrong" and therefore remained "constructive". Perhaps the…

…Miton CIO Neil Birrell said while stock markets were showing no sign of collapsing right now, that might be because investors weren't yet plugging in 5%-plus yields into their longer-term profit forecasting models. " The markets look fine until everyone re-runs their valuation models ," Birrell said. "Ultimately, the numbers are the numbers and they've got to come through." Published on September 23, 2026…