Global news wrap: US yield, China’s stimulus, iPhone 16

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Subscribe to enjoy similar stories. Every month, Mint’s Plain Facts section brings out an update on key global data to thread together the biggest developments in the world that are worth paying attention to. The accompanying analysis and charts explain how each development is creating ripples on the global stage, where it is headed in the coming weeks, and whether it can impact India.

This month we track how a faster rise in the US 10-year treasury yields is becoming a cause of worry. Meanwhile, China has announced a stimulus package and lowered key policy interest rates to push economic growth. The US Federal Reserve delivered a sharp cut of 50 basis points in its benchmark interest rate earlier this month amid a weak job market and fears of recession.

However, despite the cut, the treasury yield curve rate has risen, especially for the benchmark 10-year notes. This has led to a wide gap with the closely followed two-year note yield, leading to what’s called a “bear steepener" (when long-term yields rise faster than short-term ones). This signals expectations of higher inflation, a bearish outlook on the stock market, and a possibility of recession.

The steep rate cut itself led to conversations about an “imminent recession" triggered by tighter monetary policy. While several economists have also rung the recession alarm bells, the rising yield suggests the Fed may have to ease the interest rates further to avoid a recession. While the Fed has signalled cuts of 150 bps by the end of 2025, the market is expecting a 200 bps cut, according to CME Group’s FedWatch.