If the Bond Market Sell-Off Triggers a Recession, Decades of History Says Investors Should Do This 1 Thing

The 10-year U.S. Treasury yield has risen from about 4.03% a year ago to about 5.24% as of Oct. 11, its highest level since 2002, as bond investors demand higher yields amid U.S. national debt that has passed $40 trillion. Higher yields raise borrowing costs for consumers and businesses and can hit sectors such as homebuilding and auto loans, and if they rise fast enough they could contribute to a recession, though the article stresses this is not guaranteed. It notes the current 10-year yield of 5.22% is still 56 basis points below its 50-year average, and the S&P 500 has averaged 9.98% annual returns since 1928 while recovering from every past recession, crisis and crash. The article's main message is to stay cautious about bond yields without overreacting, and to keep a long-term perspective.

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