Martin Wolf on the latest market turmoil
The FT's Martin Wolf writes about the latest tremor in markets and why it's a healthy event.
"The US 30-year conventional bond still yields a mere 3.1 per cent. Italy's 30-year bond yields much the same, while Germany's yield 1.4 per cent. It takes no imagination to visualise these yields jumping massively," he writes today.
At the same time, he highlights the potential for rising interest rates. I'm skeptical that an uptick in wages was the trigger for the rout in markets but I'm certain that fear about inflation and higher bond yields is going to be a big story in 2018.
A rise to 3% in US 10s is inevitable and it's also inevitable that it will cause jitters in equities and elsewhere. I think that ultimately 3% isn't going to cause too much trouble but it might be a different story at 3.5%.