The US Treasury yield curve is steepening, with the longer duration yields tracking the inflation expectations higher. The spread between the 10- and two-year yields has risen to 96 basis points, the highest level since July 17, 2017. The 10-year yield has increased to a 10-month high of 1.09 alongside the 10-year breakeven rate’s ascent to highest since November 2018. The rising treasury yields could become the reason for a correction in the equities trading at record highs. “A big argument for buying the US stocks now at such high valuations is their value relative to extraordinarily low bond yields. As Treasury yields rise, that advantage gets diminished. Right now, the earnings yield on the S&P 500 is the lowest vs. 10-year Treasury yields since 2018,” Bloomberg’s Lisa Abramowicz tweeted Thursday. A potential drop in equities will likely bode well for the oversold US dollar. As such, if the steepening of the yield curve gathers pace, the Federal Reserve may have to consider yield curve control strategy and target a specific level at the long-end of the curve. “Looks like the Fed will have to start talking about Yield Curve Control soon as the US yield curve keeps steepening,” market analyst Holger Zschepitz tweeted. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Australian PM Morrison: Covid situation in Brisbane is “serious” FX Street 2 years The US Treasury yield curve is steepening, with the longer duration yields tracking the inflation expectations higher. The spread between the 10- and two-year yields has risen to 96 basis points, the highest level since July 17, 2017. The 10-year yield has increased to a 10-month high of 1.09 alongside the 10-year breakeven rate's ascent to highest since November 2018. The rising treasury yields could become the reason for a correction in the equities trading at record highs. "A big argument for buying the US stocks now at such high valuations is their value relative to extraordinarily low bond yields.… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.