Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
China said on Saturday it strongly opposes Washington's decision to levy additional tariffs on $550 billion worth of Chinese goods and warned the United States of consequences...Politicsread more
The European Union will respond in kind if the U.S. imposes tariffs on France over digital tax plan, EU chief Donald Tusk told G-7.Technologyread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
The final week of August could be highly volatile as markets fret over the economy and the latest developments in trade wars.Market Insiderread more
Federal Reserve Vice Chair Richard Clarida said Friday that the global economy has deteriorated in the past month.Marketsread more
The latest escalation in the trade war ups the odds the economy will fall into recession and that the Fed will aggressively cut rates.Market Insiderread more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
"We don't need China and, frankly, would be far better off without them," Trump tweeted.Politicsread more
Recent trade friction between the two Asian powerhouses has morphed into a dispute with political implications that go far beyond the region.Asia Politicsread more
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" Trump wrote amid a series of tweets that rattled markets Friday.Politicsread more
All eyes are on the U.S. 10-year Treasury yield on Monday as it could imminently hit the 3 percent threshold — a level deemed particularly worrying by investors.
"The 3 percent level is a big psychological point for investors and has gained huge focus," Roger Jones, head of equities at London and Capital, told CNBC via email.
Indeed, the 10-year Treasury yield was at 2.9882 percent at about 6:20 a.m. ET, inching closer to 3 percent — a level not seen since 2014.
Subsequently, yields have mostly followed a downward path on the back of support from central banks, which tapped into bond markets in the wake of the global financial crisis in 2008 to boost their economies. But their prolonged intervention has made investors accustomed to their support and to the guarantee that central banks would be there in case things turned badly — leading to higher equity investing, when investors buy shares of companies.
As the 10-year yield stops following that downward trend, it raises concerns that the positive outlook for equity investment is about to end.
"It is not the move towards 3 percent Treasury yields which is unusual, but the historically low level of yields we've seen in recent years, reflecting the long-lasting scars of the financial crisis," Seamus Mac Gorain, fixed income portfolio manager at J.P. Morgan Asset Management, told CNBC via email.
"The now healthier global economy justifies these higher yields. We expect 10-year Treasuries to end the year between 3 and 3.5 percent," he added.
But, above all, the 3 percent level has a "psychological" aspect that makes markets anxious. The 10-year note is used as a benchmark for many financial instruments, including mortgages and as a barometer of investor confidence.
"Three percent is a psychological level… Rates were never able to break that trend-line durably event since the early '80s," Francesco Filia, chief executive of Fasanara Capital, told CNBC via email. "To break it neatly and clearly would reignite fears that rates rise is durable."
The problem of a long period of rates increases is the implication for those making investments. Higher rates mean that companies will have higher costs when borrowing money, but they also mean that their debts become more expensive. As a result, companies will have less room to increase salaries, to invest in their business and to give returns to shareholders.
"Higher rates are unloved by equities," Filia said, adding that, ultimately, higher rates also increase the risk of defaults.
So higher rates not only make equities less attractive, but they also signal that the economy is, or could be, at risk. If companies see their margins squeezed, they might be forced to pay less to employees, even lay-off people.
The particular effect of higher rates on mortgages also lowers people's ability to spend elsewhere. Therefore, society is no longer able to spend the way it has been, and this ultimately kicks off an economic crisis.