The "U.S. debt volcano" continues to erupt. U.S. media warns: Investor losses may be comparable to a full stock market crash
Overseas Network, October 9th, according to the US "Business Insider" website reported on the 7th, affected by the surge in interest rates, the "U.S. debt volcano" continues to erupt, and investors are increasingly worried that the purchasing power of American consumers is about to collapse. The losses could be comparable to a full stock market crash.
A press conference by Federal Reserve Chairman Powell in September dashed Wall Street’s dream of “low inflation + rapid economic development.” Powell's insistence that another interest rate hike may be needed to quell inflation triggered a continued rise in U.S. bond rates. U.S. stock and bond markets reacted quickly and violently. The 10-year Treasury yield surged to 4.84%, while the S&P 500's decline since late July extended to nearly 10%. Earlier this year, soaring interest rates triggered huge bond losses at some regional banks in the United States, leading to the collapse of financial institutions such as Silicon Valley Bank. At the time, the yield on the 10-year U.S. Treasury note was below 4%. Today, it is close to 5%.
Bonds held by investors and banks face huge risks, with losses that could rival a full stock market crash. By then, bonds with maturities of 10 years or more may plummet by 46%, comparable to the bursting of the U.S. Internet bubble in 2000. Meanwhile, consumers are being pushed to their limits. U.S. credit card debt has topped $1 trillion; delinquency rates on auto and credit card loans are rising; student loan payments will resume this month for the first time in three years; and mortgage rates near 8% are making Millennials’ The cost of buying a home is too high.
Overseas Network, October 9th, according to the US "Business Insider" website reported on the 7th, affected by the surge in interest rates, the "U.S. debt volcano" continues to erupt, and investors are increasingly worried that the purchasing power of American consumers is about to collapse. The losses could be comparable to a full stock market crash.
A press conference by Federal Reserve Chairman Powell in September dashed Wall Street’s dream of “low inflation + rapid economic development.” Powell's insistence that another interest rate hike may be needed to quell inflation triggered a continued rise in U.S. bond rates. U.S. stock and bond markets reacted quickly and violently. The 10-year Treasury yield surged to 4.84%, while the S&P 500's decline since late July extended to nearly 10%. Earlier this year, soaring interest rates triggered huge bond losses at some regional banks in the United States, leading to the collapse of financial institutions such as Silicon Valley Bank. At the time, the yield on the 10-year U.S. Treasury note was below 4%. Today, it is close to 5%.
Bonds held by investors and banks face huge risks, with losses that could rival a full stock market crash. By then, bonds with maturities of 10 years or more may plummet by 46%, comparable to the bursting of the U.S. Internet bubble in 2000. Meanwhile, consumers are being pushed to their limits. U.S. credit card debt has topped $1 trillion; delinquency rates on auto and credit card loans are rising; student loan payments will resume this month for the first time in three years; and mortgage rates near 8% are making Millennials’ The cost of buying a home is too high.