Fed Policy and Global Liquidity: What Rising Yields Mean for Risk Assets

The 10-year Treasury yield climbed 11 basis points to 4.94% this week, its highest level in two weeks, pressuring risk assets across equities and precious metals. This move comes ahead of the August Consumer Price Index print. Markets price an 85% probability the Federal Reserve holds rates steady at next week's FOMC meeting. The real story is not whether the Fed moves or not. What matters is what rising real yields and contracting liquidity conditions mean for assets in the months ahead.

Key Takeaways For more on Fed policy, see our Fed policy coverage hub .

The 10-year Treasury yield jumped to 4.94%, its highest level in two weeks, pressuring equities. Fed funds futures price an 85% chance o…