Could the bond bear market persist for years?
The 10-year note yield, in a secular downtrend since the 1980s, bottomed at 0.32% in 2020 before soaring 470 basis points to 5.02% in 2023 due to high inflation. Yields are nearing 5% again as inflation rebounds and the labor market stays strong.
If inflation remains high, yields could rise to 6%, driving significant shifts in market dynamics and borrowing costs. The key question: Can markets handle prolonged higher yields?
