Rapid bond yield moves have preceded major financial crises
FROM THE WIRE · FINANCE.YAHOO.COM
The risk around rising bond yields isn't just higher borrowing costs. It's what happens when yields move too far too fast. Macquarie strategists pointed out that "almost all of the high-profile financial blow-outs" over the past five decades have occurred in the immediate…
Read at the source ↗MARKET IMPACTHIGH✦ News Impact agent estimateTone: expected bearishMacquarie strategists highlight that nearly all major financial crises in past 50 years were preceded by rapid moves in long-term bond yields.AI-generated summary
✦ IN BRIEF · AIAI-generated summary
- 01Over past 50 years, sharp increases or decreases in long-term yields occur every few years.
- 02Nearly all high-profile financial blow-outs followed rapid moves in bond yields.
- 03Risks include 'balance sheet-induced mini-crises' following rapid yield moves.
- 04Historical examples include Franklin National Bank collapse in 1974 and Orange County municipal bankruptcy.
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