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Explainer: Why rising rates are unsettling Wall Street
 [AP via NYP] Yes, it’s possible to have too much of a good thing, and that’s exactly why stock markets around the world are getting so unsettled.Optimism for an economic revival is surging following a year of coronavirus-induced misery. But expectations for stronger growth — plus the higher inflation that could accompany it — are pushing interest rates higher, which is forcing investors to re-examine how they value stocks, bonds and every other investment. When it tries to figure out the value for anything from Apple’s stock to a junk bond, the financial world starts by comparing it against a US Treasury bond, which is what the government uses to borrow money. For years, yields have been ultralow for Treasurys, meaning investors earned very little in interest for owning them. That in turn helped make stocks and other investments more attractive, driving up their prices. But when Treasury yields rise, so does the downward pressure on prices for other investments. All eyes have been on the yield of the 10-year Treasury note, which climbed above 1.50% this week after starting the year around 0.90%. Here’s a look at why that move shook up the financial world, including the worst week for the Nasdaq composite since October: Posted by: Besoeker 2021-02-27 |
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