| If you feel like you've heard enough about bonds in 2021 and couldn't think of a more boring investing topic even if you tried, well, the story around them is back. And that's because they're oftentimes viewed as a barometer of the broader economy. Remember bond yields fall as their prices rise. The more buyers or increased demand for bonds results in rising prices—and falling yields. So when the yield on the 10-year Treasury moves upwards (as it has for the past few weeks), investors are demanding more in return for holding onto those bonds. Bonds are also subject to interest rate risk, and when the time comes for the Federal Reserve to raise rates, bond prices may fall. Currently though, if the Fed keeps interest rates this low while bond yields keep rising, you can welcome inflation for a longer than expected stay. What the bond markets are telling us now After a pretty red September for indices across the board, the market has since found new hope in the short-term by way of postponing the US debt crisis and some pretty solid earnings reports. However, many analysts are warning that this utopia might be brief. The problem is not that bond yields are rising so high that they're pulling investors away from the equity markets. Instead, it's the fact that the markets continue to rally as rates stay low. 
Other noteworthy implications - Tech stocks will be tested: Because these high-growth companies often depend on outside financing to meet their goals, rising bond yields mean that borrowing costs are rising too. Tech stocks that have boomed, thanks to cheap borrowing rates, in particular, will be tested. Overvalued stocks and complacency are a continued risk for this bull market, so keep an eye on an index like the Nasdaq 100 when bond yields rise.
- The upside: This isn't your classic situation where high yields can dissuade investors from buying high-priced stocks, but a unique situation where bond yields are already incredibly low (albeit inching upwards), and stocks keep flying higher, so where is the upside?
The takeaway. Combining all of this with the fact that economic growth is decelerating and the impending tapering to come, we have a recipe for a potential showdown for certain stocks and sectors. It's uncertain if and when the market will undergo a correction or how deep it will cut, but investors should be aware of the looming threats to the companies they're either holding or looking to buy. Tapering, elongated inflation, apparent prolonged supply chain issues and more seem to be closer at hand than ever. ⚙️ Need a bite-sized refresher on how bonds work? | 
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