🔥 The Fed Isn’t the Only Thing Driving Yields

Treasury buybacks are supposed to help support demand for longer-dated government debt.

But this week, something interesting happened: the Treasury bought long-term bonds, yet long-term yields kept climbing.

The 10-year yield pushed above 5%, while the 30-year also hit levels not seen in years.

That matters for stocks because the 10-year Treasury is basically the benchmark investors use when comparing the potential return from equities.

When “risk-free” yields get higher, the math changes.

Suddenly, a stock trading at a high valuation has to compete with a much higher return available from government bonds.

And that can be particularly uncomfortable for growth stocks, where a lot of the valuation depends on earnings expected years into the future.

But there’s another side to this.

Higher yields don’t automatically mean stocks have to fall. If yields are rising because the economy is stronger than expected, companies can still deliver enough earnings growth to justify higher valuations.

So I’m watching the reason behind the yield move, not just the number.

📈 Strong growth + rising yields = potentially manageable.

⚠️ Sticky inflation + rising yields = much tougher setup for valuations.