The real issue in markets may not be high bond yields, but the inability to feel at ease even as rates decline. The U.S. 10-year yield is falling, but if stock markets aren’t benefiting from this, there are two possibilities: Either the pressure on rates is easing, or investors are fleeing risky assets and seeking safety in bonds. In one scenario, relief is beginning; in the other, fear is growing. The difference between the two won’t be shown by interest rates themselves, but by how markets respond.
