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Higher bond yields may hint at value stocks' outperformance ahead

Treasury rout goes global, another bad day for tech, and cryptocurrencies drop.

Yesterday’s Federal Reserve minutes and the spike in Treasury yields has sparked a selloff in bonds around the world. Germany’s 10-year borrowing costs hit the highest since May 2019, while yields in Japan and Australia also jumped.  The 10-year Treasury yield is at 1.737% this morning with overnight swaps now implying an 80% chance of a 25-basis point rate hike in March. Investors are also on alert for the moment the Fed starts to pare its balance sheet, an event that could unfold relatively soon after the first hike.