Many investors are focused on the sell-off in the stock market, but as you can see on the following chart, shares of the iShares 7-10 Year Treasury Bond ETF IEF are in a freefall. This ETF is designed to track bond prices.
The bond market is crashing and this should concern stock market investors.
Many large investment funds have huge holdings of treasury bonds. If the current sell-off in the stock market continues, it may result in margin calls. This could result in many of these funds selling stocks to raise the funds they need.
This could cause more selling in the equity market and the downtrend could continue.
To learn more about trading, check out the new Benzinga Trading School.
Photo by Kampus Production/Pexels
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.