The 10-year Treasury yield is currently approaching 5%, having risen by more than 20 basis points since September, close to the magnitude of a single Federal Reserve rate hike. Goldman Sachs states that the speed of the rise in Treasury yields is more noteworthy than the psychological level itself. The current 10-year Treasury yield has deviated by two standard deviations (2σ) from its three-year level, roughly equivalent to a 50 basis point increase in one month or a 30 basis point increase in two weeks—a type of interest rate shock historically difficult for the stock market to absorb. Based on the provided data, the S&P 500 index could fall by more than 1%, and if real interest rates also rise similarly, the S&P 500's decline could extend to over 4%. (Goldman Sachs report, September 13)
