JPMorgan warned that bond yields reaching the 5% to 5.25% range represent a significant risk for global stock valuations. The US 10-year Treasury yield has climbed to roughly 4.8%, its highest level in nearly three years, while Japan’s 10-year government bond yield has surpassed 3% for the first time since 1996. UK 30-year gilts have reached levels not seen since 1998. This massive bond selloff is driven by persistent inflation, rising oil prices and an aggressive repricing of central bank rate expectations. The Federal Reserve, European Central Bank and Bank of Japan are all adjusting their monetary policy outlooks in response to these inflationary pressures.
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