Bonds have been whispering in the ears of stock investors all year. Now they’re starting to shout.
Soaring inflation and tightening monetary policy boosted rates on 10-year Treasuries to 3.5% last week, the highest since 2011. While comparing bonds with ever-volatile stocks is tricky, various measures show the allure of fixed income growing. Stocks generate about 5.3% of their price in earnings, on average, making the gap between the two asset classes’ “yield” close to the slimmest since 2018.