Why the ten-year’s hitting 3.25% has spooked asset markets

This is how Fed tightening regimes work
We're bracing for another big sell off in equities today. I don't know if you saw my piece yesterday on market groups breaking below 50- and 200-day daily moving averages. I said "I don’t have a view on whether this is important. But the technicals are weak."  For me, this is part and parcel of a late-cycle Fed tightening regime that I described in February.
...as inflation expectations increase, the interest rates investors will accept will climb slowly. Equity markets won’t throw a fit at 2.85% interest rates... Instead though, it could be smooth sailing until 10-year interest rates hit 3.00%. And then we see more market volatility. But once that level settles in, the acceptable rate might climb to 3.25%. And we will repeat the process all over aga...


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