Rates Volatility Likely to be Key Influence on Risk Asset Prices

Dow Jones
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0803 GMT - Volatility in government bond yields is expected to be a major driver of risk asset prices, BCA research's Felix Vezina-Poirier says in a note. Sovereign bond yields have climbed to multiyear highs due to inflation concerns given high oil prices. "The level of yields matters less for equities than how quickly rates move, making implied rates volatility the more useful gauge of equity risk." Nonetheless, the U.S. Federal Reserve Chairman Kevin Warsh's speech last week signalling readiness to act to contain inflation should keep rates volatility fairly contained, Vezina-Poirier says. Ten-year U.S. Treasury yields rise 2.4 basis points to last trade at 4.782%, having hit 4.786%, their highest since January 2025, LSEG data show.

 

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