Stocks Fall to End a Bad Week, and a Boom Begins to Look Shaky
The immediate catalyst was the jobs report, which showed the strong United States economy might finally be translating
into rising wages for American workers — a sign that higher inflation could be around the corner.
Given the strength of the global economy, central banks, led by the United States Federal Reserve, have started to remove some of the supports
that helped supercharge stock and bond prices over the last decade.
Interest rates that are set every day in the global bond markets are already leaping
higher, in anticipation of central bank rate increases later this year.
Janet L. Yellen, the Federal Reserve’s departing chairwoman who had her last working day on Friday, was viewed by some as being more concerned
about measures of weakness in the job market than by the risk of rising inflation, and therefore more willing to keep rates low.
Their goal was to incentivize investors to put their cash to work in the economy — for example, by buying corporate stocks
and bonds — rather than stashing it in the relative safety of government bonds.
On Friday, the yield on the 10-year Treasury note — a widely used gauge for overall
interest rates — rose to more than 2.8 percent, the highest level since early 2014.
Since stocks began climbing during the depths of the Great Recession in 2009, their rise
has been supported by some of the lowest global interest rates seen since World War II.