Amidst prospects of an extended period of higher interest rates by the Federal Reserve, the continual rise in US Treasury yields has reverberated across the S&P 500 Index, potentially culminating in the largest single-month decline seen this year.
Scott Chronert, US Equity Strategist at Citigroup, noted in a telephone interview that the yield on the US 10-year Treasury broke through the previously sustained 3.5%-4% range in August. As yields surge, the valuation of the stock market is experiencing an impact.
Rick Rieder, Chief Investment Officer for Global Fixed Income at BlackRock, also weighed in, stating that certain investors in the stock market are apprehensive that the robust US economy might prompt the Federal Reserve to intensify its monetary policy tightening.
This sense of apprehension, coupled with the increased supply of US Treasuries, appears to be exerting pressure on the stock market.
