Welcome to Thoughts on the Market.

I am Vishiturpatore, Global Director of Fixing Comresearch, along with my colleagues

bringing you a variety of perspectives.

I'll be talking about the impact of a rising rate environment across asset classes.

It's Tuesday, March 2nd, at noon in New York.

The conversation over the last few weeks has been squarely on one thing, higher interest

rates, particularly higher 10-year interest rates.

Why so much conversation?

The 10-year rate is closely tied to the rates of mortgages, business loans, consumer loans,

and so on.

So in a sense, it's key to the economy and key to equities, bonds, real estate, commodities,

pretty much every risk asset.

Since the beginning of the month, 10-year interest rates are up almost 45 basis points,

and up about 55 basis points if you start counting from the beginning of the year.

Considering the history of the last 12 months, this shift higher is noteworthy.

Combined type valuations across disc assets, sprinklin' memories of the 2013 taper tantrum

that have not entirely faded, and it is not surprising that the specter of spiking yields

portends caution in some quarters as it reflected in equity markets last week.

However, looking under the hood tells a very different story.

Understanding why yields are rising is the more pertinent question, and we argue that

higher real yields, along with rising inflation expectations, could create an environment

where yields are rising for good reasons.

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