Major repricing event underway in TradFi markets

quick take

  • Since the 2008 Global Financial Crisis (GFC), the zero interest rate policy along with quantitative easing has been the norm for the past 15 years.
  • This policy has contributed to asset inflation, which is expected to reverse. However, the extent of this reversal remains unclear.
  • Both the equity and real estate sectors thrive in an environment where credit is cheap. But with Treasury yields now above 5% at the start of the yield curve, the incentives are shifting.
  • Dylan LeclairThe Bitcoin magazine analyst handed out a graph showing that the current 3-month US Treasury yield is roughly equal to the S&P index yield and the US corporate bond yield (below).
  • As yields on government bonds are globally perceived as ‘risk-free’ rates, holding other assets is becoming less attractive, especially when they yield around 5%.
  • Furthermore, the average rental yield for UK property is 5-7%. Not only is this below consumer price index (CPI) inflation, but it is also becoming less attractive as yields are starting to rise above 5%, making it potentially a more attractive investment option. be.
Price: (Source: Bloomberg/FT)
region area Gross rental yield
east midlands Nottingham city 6.49%
Boston area 6.01%
Mansfield area 6.00%
eastern england fenland district 5.60%
city ​​of peterborough 5.49%
Great Yarmouth District 4.56%
London barking and dagenham 5.12%
Newham 4.87
Bexley 4.80%
northeast Hartlepool 7.64%
middlesbrough 7.61%
Sunderland 7.61%
northwest Burnley 7.92%
liverpool 7.02%
Hydeburn 6.98%
southeast City of Portsmouth 5.60%
gosport district 5.54%
city ​​of southampton 5.54%
Southwest city ​​of plymouth 5.64%
gloucester district 5.45%
Swindon 5.40%
wales brynau gwent 7.02%
Mercer Tafle 6.54%
Rhonda Cynon Tough 6.44%
west midlands stoke-on-trent city 6.63%
coventry district 6.04%
Newcastle-under-Lyme District 5.98%
yorkshire and hamburger north east lincolnshire 6.72%
Barnsley District 6.45%
City of Kingston Upon Hull 6.42%

Source: Zoopla

The ongoing major repricing event in the TradFi market first appeared on CryptoSlate.

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