Are we headed for 'bondmageddon' and what will be the impact on equity markets?

US 10-year Treasury yields hit seven-year high

Joseph Amato, president and chief investment officer of equities at Neuberger Berman, explains why rising bond yields, not a recession, are most likely to trigger the next equity market correction.

Last Wednesday, another hot US employment data point - ADP private sector payrolls - took the US 10-year Treasury bond yield rocketing towards 3.25% and to levels we have not seen for seven years. This was as violent a move as we have observed in a long, long time. Along with Tuesday's announcement of a pay rise at Amazon, last week's good news for workers lit a fire under global bond yields, and Friday's steady US wage growth and employment data did little to douse it. Is this the big adjustment in interest rates that investors have been anticipating for years? Have we finally seen t...