The 5% yield on US Treasuries has lost its deterrent effect, and markets are now pricing in a 6% yield.

US 10-year Treasury yields have returned to the 5% mark, yet the crypto market and global equities have not seen sharp sell-offs. Wall Street’s pressure threshold for interest rate risk is gradually shifting from 5% to the 5.5%–6% range. Mike Bell, Head of Market Strategy at BlueBay Asset Management, noted there is no absolute “magic point” in the market that triggers sell-offs; the key lies in the relative premium between U.S. Treasury yields and risk assets’ earnings returns. As risk-free yields continue to rise, if corporate earnings do not expand in tandem, stock risk compensation will remain compressed. JPMorgan’s recent communications with large institutional investors found that market participants generally believe the yield level that could force a full revaluation of stocks has risen from 5% to 5.5%–6%. The growing share of AI, advanced manufacturing, and high-end services has also given some high-growth enterprises more abundant cash flow, weakening the short-term impact of high interest rates on corporate investment. However, financing costs above 5% may still exert sustained effects. Paul Jackson, Head of Global Asset Allocation Research at Invesco, pointed out that when the 12-month moving average of 10-year U.S. Treasury yields rises above 4.72%, global equities tend to face material pressure. Currently, this average stands at around 4.34%. Fed official Austan Goolsby also warned that a short-term 5% yield is not the same as a sustained yield above 5%; persistent high financing costs will eventually erode corporate budgets and capital expenditures. Neil Birrell, Chief Investment Officer at Premier Miton, added that the current market calm partly stems from institutional profit models not fully incorporating long-term discount rates above 5%; real pressure may emerge when the market focuses on revaluing forward cash flows.