Bondholders Risk $2.6 Trillion Hit on Even a Modest Yield Rise
(Bloomberg) — After a wild week on Wall Street that saw inflation expectations reach decade highs, portfolio managers are staring down an ever-more dangerous prospect: A modest rise in yields that inflicts trillions of dollars in losses.
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It’s a result of investors’ exposure to duration, a key gauge of risk for bondholders that’s near record highs. Even a half-percentage point jump in yields from here, to roughly the pre-pandemic average in 2019, would be enough…