10 year bond yield has spiked up and reached a 4 year high of 3% today. 10 year yield has not seen yield of 3% since January 2014. Also noticeable is that the 2 year bond yield has risen upto 2.5%. Thus the spread is only 0.5% between the 2 year and 10 year yield. Historically, this is also a sign of potential recession. That’s a topic for another day though.
Agreed, that the 10 year yield has not been this high for a long time now. But, if you look at the bigger picture and look at the historical data, you will notice that 10 year yield has been high historically. Between 2003 and 2007, yields ranged from a low of 3.4% to a high of 5.14%. Markets continued to went up in spite of the rate spikes. In the 1990’s, the yields ranged between 6% to 8% constantly. So, while inflation remains a concern, the markets can continue to grow as the fundamentals continue to be strong.