Growth in US government bond yields led to sales on stock exchanges

Baku. 31 January. REPORT.AZ/ The growth in the yield of 10-year government bonds in the US up to 2.733%, the maximum for 4 years, led to the start of sales on major stock exchanges.

Report informs, although analysts predicted an increase in the yield of US government bonds by the end of the year, the process began earlier. As a result, the main US stock index Dow Jones for the past two days fell by 540 points or 2.02%, up to 26,077 points.

Experts predict that if the yield of bonds overcomes the psychological barrier of 3%, it will lead to negative consequences for the world financial markets. So, raising rates will increase the cost of corporate financing. At the same time, there is a possibility of a sharp decline in stock indices, which are now at record levels. In addition, the process of strengthening the US dollar will accelerate.

Today, US Federal Reserve System (Fed) will announce the results of the next meeting. Although the increase in the discount rate at this meeting is not expected, the Fed may announce a tightening of monetary policy. As a result, an opinion may be formed about increase in rates several more times in 2018.