After briefly dipping down to around 4.25%, last week saw a new cycle high for the closely followed 2 year Treasury yield breaking through the 4.8% level and ending the week at 4.814%.
This came off the back of continued unfavorably strong inflation and spending data from economic reports issued over the past few weeks (Core PCE, retail sales, GDP, PPI, etc.).
With the earnings yield on the S&P 500 is 4.68%, the equity risk premium on the S&P 500 (estimated earnings yield less 10yr treasury yield) is now the lowest since late 2007.
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