All the focus is on stocks and crypto today but what's happening in bonds is arguably worse.

US 10-year yields are up 12 basis points today to 3.27%. That's just a shade above 3.20% in 2s, endangering a fresh inversion.

But the bigger story is the broad bond market selloff. Higher yields have been the trend for months but that we're seeing them rise so much on a day when stocks are down another 2.5% is worrisome in the worst kind of way.

Today's rise above 3.26% breaks the 2019 high in yield and the monthly chart shows we're at the highest yields since 2011.

US 10 year yields

That means there's no safe haven out there. Historically a balanced portfolio of stocks and bonds would cushion one another but they're both puking today.

That shows this is a true deleveraging as the market cowers at the idea of the Fed hiking its target rate to 4% in the months ahead.

Here are the thoughts from the BMO rates team today:

"We’re certainly sympathetic to the market’s hawkish interpretations of balance of risks and it goes without saying that when Powell appears on Wednesday the FOMC will endeavor to deliver reassurance investors that combatting inflation remains the Committee’s top priority.

The obvious question is how the Fed can effectively communicate this without materially accelerating the selloff currently underway in risk assets. Alas, this challenge has faced Powell on a number of occasions during this cycle and, as a theme, the Chair has erred on the side of over-delivering hawkishly. Our take is that the most likely hawkish outcome is the Fed will put a 75 bp hike on the table for July; making such a move conditional on the ongoing acceleration of consumer prices. Meeting such a requirement given the current macroeconomic landscape doesn’t appear to be particularly difficult; so this would go a reasonable distance toward calming investors’ renewed inflationary angst. There is an argument to be made for 75 bp on Wednesday; although the biggest counterpoint is that the market would simply assume every remaining meeting in 2022 would see a similar 75 bp hike. The obvious result would be a sharp selloff in the front-end, striking curve inversion, and, of course, a true bear market for US equities.

While taking some of the upside out of risk assets will serve to achieve the Fed’s objective of containing consumer prices via offsetting the wealth effect; it most certainly increases the chances of changing a bumpy landing into a crash landing. Suffice it to say, this risk is very much top-of-mind this morning."