Markets are reeling from higher rates. The world economy is next
If the Fed tightens until something breaks, the first cracking sounds could be in Europe
The world’s financial markets are going through their most painful adjustment since the global financial crisis. Adapting to the prospect of higher American interest rates, the ten-year Treasury yield briefly hit 4% this week, its highest level since 2010. Global stockmarkets have sold off sharply, and bond portfolios have lost an astonishing 21% this year.
This article appeared in the Leaders section of the print edition under the headline “The rate shock”
Leaders October 1st 2022
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