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CNBC: History shows financial calamities occur when rates rise rapidly like this: 'Something always breaks'
The jump has pushed regional banks and utilities lower and could lift mortgage and borrowing costs across the economy, analysts said.
- On Thursday, the 10-year Treasury yield topped 5.17%, marking its fastest one-day increase since April 7, 2025. Borrowing costs surged from below 4.8% just two weeks ago to multi-year highs.
- Analyst Roque characterized the trend as a "secular rate rise for bond yields and a secular bond bear market." Rapid yield jumps historically preceded disruptions from the 1987 stock crash to the 2023 Silicon Valley Bank failure.
- The State Street SPDR S&P Regional Banking ETF has fallen nearly 10% below its recent high. Utilities also declined more than 4% in the past week, becoming the biggest laggard among 11 sectors.
- JPMorgan advised investors to "keep an eye on bond" as a stock market headwind. Roque warned that regional banks must remain stable, stating, "If regional banks continue to go down... you cannot have a strong market."
- Roque warned, "We should be prepared or forewarned that rates are rising and something is going to break." Rising borrowing costs now affect everything from mortgages to hedge fund trades, signaling broad financial exposure.
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History shows financial calamities occur when rates rise rapidly like this: ‘Something always breaks’
The 10-year Treasury yield is climbing at a pace Wall Street has learned to fear—not only because of how high it has gone, but because of how fast. The note posted its sharpest one-day jump since April 7, 2025, on Wednesday and pushed above 5.17% on Thursday, the highest since July 2007. Two weeks earlier […]
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