The sharp jump in 10-year Treasury yields rattled the stock market, but it doesn’t signal a wave of super-inflation, analysts told CNBC Thursday.
Yields on 10-year U.S. government bonds jumped more than 50 basis points in the last two weeks, which sparked a selloff in stocks Wednesday. But fears the rise will lead to rampant inflation could be overblown.
“I don’t think there’s super-inflation to come at all,” Linda Duessel, equity market strategist at Federated Investors, told “Squawk Box.”
“Let’s not worry about inflation now, let’s worry about the problem of the deepest recession we’ve had since the Great Depression and try to make sure that’s going,” she added.
- Watch the full interview above.
Inflation fears were on the back burner since the economy slumped into recession last year. But many market watchers believe that the waves of government cash flowing into the financial system could be storing up big problems in the future.
“We think inflation will remain very, very low for the next two years. Longer-term we’re concerned though,” Mark Vitner, senior economist at Wachovia Corporation, told CNBC.
“The yield curve being steep can be looked as a sign of strength in the economy and we do look at it that way … I don’t think this will stop the advance in the economy,” Vitner said.
Deflationary concerns to remain throughout the year and thinks the rise in interest rates could prove a drag on the private sector, Vitner said.
“I like to see a steeper yield curve, it’s certainly good for the banking business, but it’s not good for the banking business if that long-end merely because the Federal government is borrowing lots of money,” he added.
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