Impact of Rising Rates on Treasury Yields and Market Volatility

Rising rates have led to a potential increase in the 10-year treasury yield, possibly reaching 4.5% or even 5%. This shift is driven by market expectations of fewer interest rate cuts, with projections revised down to one or two cuts or possibly none. Additionally, factors like expanding term premiums and central bank policies contribute to the rise. The implications of such an increase on market volatility, especially for the VIX and equity markets, depend on whether it is driven by inflation or robust economic growth.