U.S. Treasury yields have seemingly been moving in one direction lately (higher), with the 30-year Treasury yield temporarily breaching 5% for the first time since 2007. The move higher in yields (lower in price) has been unrelenting, with intermediate and longer-term Treasury yields bearing the brunt of the move. There are several reasons we’re seeing higher yields, but rates are moving higher alongside a U.S. economy that has continued to outperform expectations, pushing recession expectations out further, and by the unwinding of rate cut expectations to be more in line with the Federal Reserve’s (Fed) “higher for longer&r

As the tides of inflation appear to be shifting, we thought it would be interesting to look at the historical correlations between stock and bond yields during periods of these changes, and what it could mean for stock prices going forward.

Appropriate with any inflation story, we must start in the 1970s. Throughout the entire decade, with a brief lull between 1971 – 1973, we saw runaway inflation. Core CPI reached its pinnacle in February 1978, coming in at 11.7%. As inflation was raging, the relationship between equity prices and bond yields was inverted. Higher yields used to fight off inflation stymied stock returns. Be

U.S. Treasury yields have seemingly been moving in one direction lately (higher) with news overnight that the 30-year Treasury yield touched 5% for the first time since 2007. The move higher in yields (lower in price) has been unrelenting with intermediate and longer term Treasury yields bearing the brunt of the move. The large move in yields is naturally generating several questions from investors such as:

• How much higher can rates go? Certainly, this is the $64,000 question, but in our view Treasury yields are moving on both fundamental and technical reasons (more on this later) but the momentum is clearly higher yields.

After a difficult September for stocks, investors are surely ready to flip the calendar to October. That’s the month that kicks off the historically strong fourth quarter. Expecting this pattern to repeat this year is tricky given the overhang of a government shutdown, interest rates near 16-year highs, a market still trying to digest the Federal Reserve’s “higher for longer” message, and a consumer who is facing some stiff headwinds as excess savings are drawn down, student loan payments restart, and the effects of higher borrowing costs are increasingly felt. Amid that complicated backdrop, here we assess prospects f