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How a Small Rise in Bond Yields May Create a Financial Crisis

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How a Small Rise in Bond Yields May Create a Financial Crisis
A view of the exterior of the Nasdaq market site in the Manhattan borough of New York on Oct. 24, 2016. Shannon Stapleton/Reuters
Daniel Lacalle
Updated:
Commentary

Ned Davis Research estimates that a 2 percent yield in the U.S. 10-year bond could lead the Nasdaq to fall 20 percent, and with it, the entire stock market globally. A 2 percent yield can cause such disruption? How did we get to such a situation?

Daniel Lacalle
Daniel Lacalle
Author
Daniel Lacalle, Ph.D., is chief economist at hedge fund Tressis and author of the bestselling books “Freedom or Equality” (2020), “Escape from the Central Bank Trap” (2017), “The Energy World Is Flat”​ (2015), and “Life in the Financial Markets.”
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