Global stocks declined on Thursday as Treasury yields continue to rise and weak corporate earnings dissuade investors. Futures on the S&P 500 and Nasdaq 100 edged lower by 0.1% as did those on the Dow Jones Industrial Average. In Europe, the Stoxx 600 index slumped by 0.8% while the MSCI Asia Pacific Index plunged 1.4% lower.
10-year US Treasury Yields rose for a fourth consecutive day, edging closer to the 5% mark for the first time since 2007. This has prompted Federal Reserve officials to insist on backing a strict fiscal policy. Federal Reserve Bank of New York President John Williams explained that interest rates are required to remain steep “for some time” in order to lower inflation to the central bank’s 2% target.
“Despite improving inflation numbers, there is a conflict as Treasury yields are rising, leading to uncertainty about the future of monetary policy,” economists at Rand Merchant Bank in Johannesburg, South Africa explained.