Overview
- Societe Generale’s proprietary model identifies roughly 4.5% on the 10‑year Treasury as the level where rising yields stop coexisting with rising stocks and begin to drag equity prices lower.
- Market moves have pushed the 10‑year to around that threshold while the 30‑year has climbed above 5%, a level not seen since 2007, intensifying concern about longer‑term rate pressure.
- Higher Treasury yields raise the discount rate used to value future corporate cash flows, which reduces present valuations and hits growth and technology firms that rely on distant earnings the hardest.
- Non‑yielding risk assets such as Bitcoin and Ethereum feel added pressure because 4.5% risk‑free returns raise the opportunity cost of holding speculative holdings for institutional allocators.
- The outlook hinges on policy and market paths: if yields stabilize near current levels markets may adapt, whereas further increases would deepen valuation stress and a meaningful slowdown that prompts Fed cuts could reverse some losses.