BCA Research: Government Bond Yield Volatility May Drive Risk Asset Prices

According to Jin10, BCA Research analyst Felix Vezina-Poirier said in a report that volatility in government bond yields is expected to become an important factor affecting risk asset prices. He said that for stocks, the speed of yield changes matters more than the absolute level, making implied rate volatility a more useful gauge of equity market risk. However, Fed Chair Kevin Warsh said last week that he was prepared to take action to curb inflation, a signal that should help keep yield volatility relatively contained.