U.S. Treasury markets have entered what HSBC strategists describe as a danger zone, with a sharp rise in long-term bond yields fuelling concerns that persistent inflation and elevated interest rate expectations could spill over into equities and broader risk assets.<\/p>\n
The warning comes as the selloff in government bonds intensified on Tuesday, pushing the 30-year Treasury yield above 5.19%, its highest level since 2007. The benchmark 10-year Treasury yield also climbed close to 4.69%.<\/p>\n
As of 9:10 p.m. ET, yields on the 30-year Treasury were up marginally at 5.184%, while the 10-year yield stood at 4.667%.<\/p>\n
\u201cU.S. Treasuries are now firmly in the Danger Zone, the level of 10Y UST that tends to put pressure on virtually all asset classes,\u201d HSBC strategists said in a note, according to CNBC.<\/p>\n
ALSO READ: UN Cuts India’s 2026 GDP Forecast To 6.4%, Still Among Fastest-Growing Economies<\/a><\/p>\n The bank cautioned that any further repricing in terminal rate expectations could push yields \u201ceven further into the Danger Zone, likely leading risk assets temporarily lower.\u201d<\/p>\n According to HSBC, markets have so far shown resilience because corporate earnings growth remains healthy, equity valuations had already adjusted partly before the recent Iran-related tensions, and investors continue to believe the Middle East conflict will primarily impact oil prices rather than trigger wider economic disruption.<\/p>\n The latest jump in yields has also drawn attention after the U.S. Treasury’s 30-year bond auction cleared above the 5% mark for the first time since 2007.<\/p>\n Interactive Brokers Chief Strategist Steve Sosnick said the move carries significant psychological weight for markets.<\/p>\n Current conditions represent a yellow alert rather than a red alert, Sosnick noted, adding that yields nearing 4.65% on the 10-year Treasury or 5.5% on the 30-year bond could trigger sharper stress across financial markets.<\/p>\n ALSO READ: GitHub Investigates Major Cyberattack Amid Claims Of Stolen Source Code Sale<\/a><\/p>\n BMO Capital Markets strategist Ian Lyngen also warned that sustained upward pressure in bond yields could begin weighing more heavily on equities.<\/p>\n \u201cIf 30-year yields climb toward 5.25% in coming weeks, there will be a more durable pullback in equity valuations,\u201d Lyngen said.<\/p>\n Wall Street stocks had retreated earlier on Tuesday amid concerns over sticky inflation and elevated oil prices linked to the prolonged Middle East conflict.<\/p>\n \n Essential Business<\/a> Intelligence,
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