Global equities feel the heat of rising US bond yields. Will India be impacted?

Global equities feel the heat of rising US bond yields. Will India be impacted?

Synopsis

Yields on US bonds are trending upwards after the Fed announced a ‘hawkish pause’ last week, cementing expectations of higher interest rates for longer. The narrowing spread between Indian and US bond yields is also likely to impact inflows into the country.

Yields on 10-year treasury bills, seen as the benchmark of cost of capital globally, have climbed to levels last seen in 2007, triggering fears that interest rates will stay ‘higher for longer’ even as the US government is heading towards a potential shutdown. Hedge fund manager Bill Ackman, who is short on bonds, believes that long-term rates will rise further. According to him, the key risks include rising energy prices, lack of fiscal

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