Ed Elson

The 10-year yield hit almost 4.7%, its highest point since January of last year.

As I said, 30-year yield hit almost 5.2% on Tuesday, its highest level since July 2007.

This is what HSBC is calling the, quote, "'danger zone.'"

meaning that yields have risen to levels where they will actually start to cause some stress in other parts of the market.

This is why it's important for investors to be aware of what's happening in the bond markets.

Meanwhile, Bank of America just published a survey.

They found that 62% of fund manager respondents expect that 30-year treasury yields will hit 6% this year.

If we hit 6%, that would be the highest level since 1999.

In other words...

despite the relative calm that we've been kind of analyzing in the stock market and trying to understand, what we're now seeing is that bond investors are looking at inflation.

They're looking at our prospects in the Middle East and Iran, what gas prices and oil prices will do to overall inflation in the rest of the economy.

And they are, as a result, freaking out.

That is what we're seeing with yields.

Lots to get into here.

What are your initial reactions?

And it all goes back.

I mean, I'm glad that you lay out some of the downstream effects or maybe we call it sort of the chain reaction that happens as a result of inflation, because this is relates to our conversation last week, which is that rising inflation has generally been almost ignored by equity investors.

investors don't seem to be that worried about the inflation.

And there are all these reasons and these arguments as to why inflation doesn't really matter.

And some of them are quite compelling.