Tom Lee of Fundstrat warns that a 10-year Treasury yield of 6% would put significant pressure on stock valuations, as government bonds would offer a near-guaranteed return that is hard to compete with. While a 5% yield remains manageable for equities, especially with third-quarter earnings tracking near 29% growth, a jump to 6% would change the calculus entirely. The 10-year yield climbed above 5% in mid-September and reached around 5.3% in early October 2026, its highest level since 2007. Economist Ed Yardeni also cautioned that a rapid spike to 6% could expose real cracks in the financial system. Lee nonetheless expects yields to fall back below 5% within six months if inflation pressures ease.
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