A panelist on Market Hang warned that a global bond sell-off and higher borrowing costs could slow AI construction and make mortgages and everyday financing costlier for households. Another panelist countered that 5% rates are not high by historical standards.
The bond-focused speaker cited a market snapshot of 4.90 for two-year yields and 5.03 for five-year yields, saying they had not traded at those levels since 2007. The speaker also said markets were pricing in about 3.8 Fed rate hikes and four ECB hikes over the next year.
The first speaker argued that comparisons with the 1970s overlook current government and business debt levels and deficits. The other panelist agreed that this was a fair qualification after saying 5% rates are not high by historical standards.
