Global financial centers tossed about under pressure on interest rates

Will the rise in interest rates end up getting the better of the rise in world stock markets? The movement, which began in August, and very clear since early February, accelerated last week, bringing the yield on 10-year Treasuries (US government bonds) above 1.70%, for the first time. times since January 2020. The benchmark rate even briefly exceeded 1.75% in session, Thursday, after a meeting of the Federal Reserve, during which the institution was particularly calm in the face of inflation. However, investors are much more worried.

According to the latest Bank of America-Merrill Lynch survey, inflation has even become their main concern in the face of the pandemic. Joe Biden’s gigantic stimulus plan makes them fear that the American economy is overheating. The rise in rates (in other words, the fall in prices) thus offsets the rise in expected inflation, which threatens to erode fixed income (coupons) from bonds.

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