J.P. Morgan said that as long as the pace of interest rate hikes by the Federal Reserve remains gradual, and interest rate hikes occur in an environment where profits are growing strongly and inflation expectations are unanchored, the global stock market can withstand the impact of interest rate hikes. A team of strategists led by Mislav Mateka wrote that the positive correlation between stocks and yields may continue, but the room for fault tolerance is narrowing; when the yield on US 10-year treasury bonds rises to about 5% to 5.5%, the risk that the relationship between the two becomes negative will rise. Strategists believe that the stock market has absorbed the rise in treasury bond yields because the current round of yield increases are driven by improved economic activity and rising profits, and real interest rates are rising, not due to rising long-term inflation expectations.

J.P. Morgan said that as long as the pace of interest rate hikes by the Federal Reserve remains gradual, and interest rate hikes occur in an environment where profits are growing strongly and inflation expectations are unanchored, the global stock market can withstand the impact of interest rate hikes. A team of strategists led by Mislav Mateka wrote that the positive correlation between stocks and yields may continue, but the room for fault tolerance is narrowing; when the yield on US 10-year treasury bonds rises to about 5% to 5.5%, the risk that the relationship between the two becomes negative will rise. Strategists believe that the stock market has absorbed the rise in treasury bond yields because the current round of yield increases are driven by improved economic activity and rising profits, and real interest rates are rising, not due to rising long-term inflation expectations.