As 5% Treasury yields lose shock value, investors start worrying about 6%

LONDON — For years, 5 percent on the benchmark U.S. 10-year Treasury yield was viewed as the point at which global financial markets would start hitting turbulence. That threshold is beginning to look less like a ceiling and more like a waypoint. This month's breach of 5 percent - something that has happened only briefly in recent decades - has forced investors to contemplate an unsettling question: What if 6 percent is the new number that should be keeping them awake at night? The latest move above 5 percent has not lasted long enough yet to properly test that theory. But it has always been a psychological marker rather than an automatic tripwire, according to BlueBay Asset Management's head of market strategy, Mike Bell. "People think of it as if there's a magic number for Treasury yields at which it becomes a problem, (but) it's a relative number, not an absolute number," Bell explained. What matters is how Treasury yields compare with other key investment metrics, particularly the earnings yield on stocks. Bell says that relationship is now approaching an inflection point, potentia