Rising rates spell trouble

The slow but steady increase in bond yields could take the shine off overpriced equity markets, says John Stepek.

The slow but steady increase in bond yields could take the shine off overpriced equity markets, says John Stepek.

This week, for the first time since late 2015, the German government had to pay interest if it wanted to borrow money over five years. Not much, mind you a mere 0.01% or so a year, still well below inflation. But it's a big change from summer 2016, when the five-year bund had a negative yield of 0.6%, meaning that markets were effectively paying the German treasury to lend it money.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.