JPMorgan's global investment strategy chief Grace Peters warned that rising bond yields pose a key risk to global equity markets as stocks enter a historically weak September. The 10-year US Treasury yield has climbed to 4.8%, approaching the 5% threshold often seen as negative for equities, while the 30-year yield hit a 19-year high. Peters expects a 5% to 8% pullback around the November US midterm elections, characterizing it as a healthy correction rather than structural deterioration. Rising oil prices and inflation fears are fueling expectations that policymakers may be forced to hike rates, pushing yields back toward levels seen before Treasury Secretary Bessent expanded buybacks to control long-term borrowing costs.
JPMorgan's global investment strategy head Grace Peters said on Wednesday that rising bond yields pose a key risk to global equity markets as stocks enter a historically weak September. While Peters expects further upside for US and European stocks this year, she warned that a 5% to 8% pullback is likely around the November US midterm elections and other risk events. She described this as a healthy correction rather than structural deterioration.
The 10-year US Treasury yield has risen to 4.8%, approaching the 5% level widely viewed as a tipping point for equities. The 30-year yield has climbed to its highest in 19 years. Markets increasingly speculate that policymakers will be forced to raise interest rates as oil prices push inflation higher, driving yields back toward levels seen before Treasury Secretary Scott Bessent expanded buyback programs to control long-term borrowing costs.
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