Treasury yields (^TYX, ^TNX, ^FVX) are booming this morning, the 10-year yield peaking above 4.7% after a softer-than-expected US GDP print.
Saxobank Head of Fixed Income Strategy Althea Spinozzi joins Yahoo Finance’s Seana Smith to discuss what the bond market may be messaging to investors on bond performances under higher inflation and interest rates.
"5% is now a very high probability [for the 10-year yield]. There is also a very high probability that the yields continue to rise towards 5.25%," Spinozzi says. "However, to see a break above that level, we need to have a second wave of inflation. We need the Federal Reserve to talk about [rate] hikes again, and right now, that’s a little bit of a tail scenario."
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