19 January 2022 - Rate Moves Hit Stocks | Rio Tinto Update Global markets were lower overnight, as US markets (S&P 500 index -1.9%) fell sharply as bond yields continue to surge. The closely watched US 2-year yield broke above 1% for the first time since February 2020, the month before the pandemic declaration that sent the US economy into recession. The 2-year Treasury is seen as a gauge of where the Federal Reserve will set short-term borrowing rates, with the market seeing the Fed as not moving fast enough with their hiking. Rates rose across the board, with the benchmark 10-year note hitting 1.86%, its highest since January 2020 – the 10-year yield started 2022 around 1.5%. There was no clear trigger or catalyst behind for the moves, but it seems as if interest rates are following the typical historical pattern of increasing into the first Fed hike of the cycle.  The market is now pricing more than four Fed hikes this year (and around a 15% chance of...