Citi is out with a note comparing the increases in global bond yields to monetary tightening and it could drag on global growth.
US 10-year yields are up 60 basis points since the beginning of May, 5-year yields are up 50 bps and 2-years are up 12 bps. Most spreads have widened slightly as well.
The additional interest costs are a significant burden for corporates but could be especially troubling for emerging markets, who are experiencing a simultaneous slowdown. Citi warns that if volatility stabilizes other countries could introduce measures to offset the effective tightening.
