45 days ago • Posted by Martin Boujol
The gap between US interest rates and equity dividend yield is gone
The sharp sell-off in US bonds we've seen recently has made them very affordable, but that's still not enough to attract equity investors. People are still afraid that a coming inflation could endanger bonds, as fixed interest payment, by definition, are worth less if inflation arrives. Today, US 10-year yields are above 1.5% for the first time in a year, catching up the gap they had with the dividend yield of S&P 500 stocks.