Bond yields soar as markets weigh threat of a recession. What it means for your investments
The policy-sensitive 2-year Treasury yield on Friday climbed to 4.266%, notching a 15-year high, and the benchmark 10-year Treasury reached 3.829%, the highest in 11 years.
Soaring yields come as the markets weigh the effects of the Fed's policy decisions, with the Dow dropping nearly 600 points into bear market territory, tumbling to a fresh low for 2022.
The yield curve inversion, occurring when shorter-term government bonds have higher yields than long-term bonds, is one indicator of a possible future recession.
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"Higher bond yields are bad news for the stock market and its investors," said certified financial planner Paul Winter, owner of Five Seasons Financial Planning in Salt Lake City.
Higher bond yields create more competition for funds that may otherwise go into the stock market, Winter said, and with higher Treasury yields used in the calculation to assess stocks, analysts may reduce future expected cash flows.
