WS #14665
The US Treasury's five-year note auction saw lackluster demand, pushing yields to their highest level since 2006, while the 10-year yield spiked to 5.13%, a 19-year high. This bond market rejection of supply is forcing a repricing of duration risk, directly pressuring high-multiple growth stocks and capital-intensive sectors like interactive media and consumer discretionary. TD Economics warns that Fed rate hike bets may be running too hot, but the bond market is currently dictating the pace of monetary tightening expectations.
Bond Market Revolt and Rate Hike Fears
The US Treasury's five-year note auction saw lackluster demand, pushing yields to their highest level since 2006, while the 10-year yield spiked to 5.13%, a 19-year high. This bond market rejection of supply is forcing a repricing of duration risk, directly pressuring high-multiple growth stocks and capital-intensive sectors like interactive media and consumer discretionary. TD Economics warns that Fed rate hike bets may be running too hot, but the bond market is currently dictating the pace of monetary tightening expectations.