Higher US Yields Are Good for Equities
(1 min read)
Many say that higher US bond yields will derail the US equity rally. Yet, US 10y yields have more than doubled to 1.24% today since their August 2020 low of 0.5%, while US equities have rallied 20% over that period. And these last six months are not unusual. Since the 2008 global financial crisis, changes in equities and bond yields are generally positively correlated (Chart 1). So, the norm is to see higher yields with higher equities and lower yields with lower equities.
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