10-Year Treasury Yield Rises to Highest Since 2007

Summary

The video discusses the US 10-year Treasury yield rising to its highest level since 2007, driven by inflation concerns tied to higher energy prices, heavy government and corporate borrowing, and expectations of another Fed rate hike. Bloomberg MLIV strategist Ven Ram argues that a structural rise in demand for capital against a stable supply of funds is pushing up the neutral rate and weighing on longer-end Treasury yields. He also says the Fed needs to hike quickly to preserve credibility, warning that failing to do so could trigger further market selling.

• 10-year Treasury yield hits 5.02%, highest since 2007.
• Market prices over 90% odds of a Fed hike at the upcoming meeting.
• Oil rally and inflation fears contribute to higher yields.
• Ven Ram cites rising capital demand and stable fund supply as lifting the neutral rate.
• He says the Fed must raise rates quickly to avoid credibility risk.
• He warns markets could sell off more if the Fed does not hike.