quick take

  • Since the 2008 Global Financial Crisis (GFC), the zero interest rate policy along with quantitative easing has been the norm for the past 15 years.
  • This policy has contributed to asset inflation, which is expected to reverse. However, the extent of this reversal remains unclear.
  • Both the equity and real estate sectors thrive in an environment where credit is cheap. But with Treasury yields now above 5% at the start of the yield curve, the incentives are shifting.
  • Dylan LeclairThe Bitcoin magazine analyst handed out a graph showing that the current 3-month US Treasury yield is roughly equal to the S&P index yield and the US corporate bond yield (below).
  • As yields on government bonds are globally perceived as ‘risk-free’ rates, holding other assets is becoming less attractive, especially when they yield around 5%.
  • Furthermore, the average rental yield for UK property is 5-7%. Not only is this below consumer price index (CPI) inflation, but it is also becoming less attractive as yields start rising above 5%, making it potentially a more attractive investment option. be.

Price: (Source: Bloomberg/FT)
Price: (Source: Bloomberg/FT)
Rental Yield: (Source: Zoopla)
Rental Yield: (Source: Zoopla)

The ongoing major repricing event in the TradFi market first appeared on CryptoSlate.

By Jules

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