Fed Governor Waller Says In Central Banking Terms, Movement Up In 10 Year Has Been An "Earthquake"; Policymakers Are Mulling What Drove Long-Term Yields Higher
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve Governor Waller has described the recent rise in 10-year yields as an 'earthquake' in central banking terms. Policymakers are currently considering the factors that have driven long-term yields higher.
November 07, 2023 | 3:29 pm
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NEUTRAL IMPACT
The rise in long-term yields could have a mixed impact on the SPDR S&P 500 ETF (SPY).
The impact on SPY could be mixed as it represents a broad range of sectors. While some sectors like banking could benefit from higher yields, others like technology could be negatively impacted due to higher borrowing costs.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
The rise in long-term yields could impact the performance of the SPDR S&P Bank ETF (KBE).
Banks typically benefit from a steepening yield curve as they borrow short-term and lend long-term. Therefore, a rise in long-term yields could potentially boost the performance of bank ETFs like KBE.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The SPDR S&P Regional Banking ETF (KRE) could also be affected by the rise in long-term yields.
Similar to KBE, KRE could also benefit from a rise in long-term yields due to the nature of banking operations. Higher yields could potentially improve the performance of regional bank ETFs like KRE.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The Financial Select Sector SPDR Fund (XLF) could potentially benefit from the rise in long-term yields.
As a financial sector ETF, XLF could potentially benefit from a rise in long-term yields. Higher yields could improve the net interest margin of banks, which could boost the performance of financial sector ETFs like XLF.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70