Well once again we had some wild swings in equity markets and then end the day with equities down and interest rates popping back higher. Almost without doubt there is more pain to come in equities.
The 10 year treasury traded around the 1.78% yield mark until the last hour of the day, when Fed Chair Powell did not back off rate hike plans or at least didn’t give markets a reason to believe he was backing off. Then the 10 year treasury yield popped to 1.85%–I suspect on the way to 2%—hopefully it will take a couple months to get there (fingers crossed)–remember that ‘speed kills’. Markets can tolerate higher interest rates if they come a few basis points at a time—but fear will set in quickly with 10 and 12 basis point jumps in a day.
Keep your seat belts fastened–they will be needed.