From October 20 to 22, by the banks of Shanghai's Huangpu River, the 2026 Sustainable Global Leaders Conference returns once again. Nobel and Turing Award winners will take the stage to discuss the future and trends of technology, and the internet-famous professor who "rescues" people from anxiety and the era of involution—Macfarlane—will hold a live dialogue with Xiang Biao!
Limited seats available, first come first served. Let us journey together toward the promise of sustainability! [Click to register] Source: Jinshi Data. JPMorgan CEO Jamie Dimon warns that if Treasury yields rise another 1 percentage point, the economic shock could far exceed that seen when they broke through 5%. A Bank of America survey shows that 37% of fund managers would consider switching from stocks to bonds when yields reach 6%. The U.S. 10-year Treasury yield recently broke above 5%, and market discussion is heating up over whether the next stop will be 6%. Jamie Dimon, the JPMorgan Chase CEO known as "Wall Street's Big Brother," said on Tuesday that he is not predicting yields will definitely rise to 6%, but that investors and borrowers need to prepare for that possibility. Six percent is not a target the market has already settled on, yet it is becoming a potential threshold for investors assessing asset allocation. The latest Bank of America global fund manager survey shows that 37% of respondents said they would consider switching from stocks to bonds if the 10-year Treasury yield reached 6%; another 14% set their threshold for shifting to bonds at 6.5%, while 19% believed current yields were already sufficient to prompt them to adjust their allocations.
Another 1 Percentage Point Rise in Yields Could Intensify Economic Pressure
Dimon pointed out that if the 10-year Treasury yield rises another 1 percentage point from the 5% level reached in September, the resulting shock could exceed the impact of the cumulative 1 percentage point rise in yields over the six months following the outbreak of the Iran war at the end of February. Rising borrowing costs have already affected households, farmers, businesses, and the U.S. government. Elevated mortgage rates continue to weigh on the housing market, this year's rally in small-cap stocks is beginning to be dragged down by high yields, and other interest-rate-sensitive stock sectors are also facing pressure. At the same time, rising energy prices and years of persistent inflation are further squeezing household budgets. George Catrambone, head of Americas fixed income at DWS, said on Tuesday that the 10-year Treasury yield still has a long way to go before reaching 6%, but high rates have already put pressure on parts of the economy outside the AI industry. If yields continue to climb, it will become even harder for borrowers to obtain financing, and financing costs will rise further. He also noted that gasoline and energy price pressures from the Iran war, along with five years of persistently elevated inflation, will place a greater burden on households. Catrambone believes the market has a degree of complacency about the AI theme, with the investment boom masking warning signals coming from other parts of the economy.
Investors Seek Solutions, but Safe-Haven Buying Could Limit Gains
Faced with the risk of further rising yields, investors are reassessing the relative appeal of stocks versus bonds. Current yields already offer higher potential returns for bond investors and savers, and if yields rise further, bond allocations may become increasingly attractive to some equity investors. At the same time, some investors are treating large AI technology stocks as a defensive choice against a high-rate environment. The Roundhill Magnificent Seven ETF was up 6.4% as of Tuesday compared with a month earlier; over the same period, the 10-year Treasury yield rose about 1.3 percentage points while the S&P 500 gained 2%. This reflects that, even as concerns grow that high rates could hit broader economic activity, market funds are still seeking relatively favorable allocation directions across different assets. However, yields will not necessarily keep climbing in a single direction. Recently, when some popular AI trades weakened and South Korea's stock market, which has a high weighting of semiconductor shares, fell, longer-dated U.S. Treasuries instead drew buying, pushing yields back down. Rising bond prices push yields lower, and if this safe-haven demand persists, it could limit further upside in Treasury yields. More signs of weakness in the U.S. economy could also drive investors toward Treasuries. Therefore, 6% is better used as a scenario for gauging potential risks and adjusting portfolios rather than as an inevitable destination. For borrowers, higher yields mean financing pressure may intensify; for investors, it means weighing improving bond returns against changes in equity valuations, economic growth, and market safe-haven demand.
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