In this week’s The Glass Half Full, Carson Group’s Ryan Detrick, Chief Market Strategist, and Sonu Varghese, Chief Macro Strategist (recording from LaGuardia Airport on a delayed flight), tackle the question on everyone’s mind: Are higher interest rates going to derail the market? The 30-year Treasury yield just hit its highest level since 2007, and the 10-year is at its highest since late 2023.
Sonu explains this is less a shock and more a normalization, with a caveat that the speed of the move matters more than the level itself. He points to two catalysts: Middle East conflict pushing oil prices higher, and the AI infrastructure boom, where companies have shifted from funding data centers with cash flow to taking on debt, creating new competition for capital.
Ryan draws the line between a slow, steady grind higher in yields (which markets have digested just fine while stocks kept climbing) versus a sudden spike, which would be far more disruptive. They unpack why this is inflationary growth rather than stagflation: Unemployment sits at just 4.1%, layoffs remain historically low, and nominal GDP growth of 5-6% looks a lot like the late 1990s, when 10-year yields averaged around 6%.
They close by endorsing the take that higher yields largely reflect a stronger economy, reiterating their call to diversify fixed income with gold, managed futures, and real assets, while the broader bull market and inflationary growth backdrop remain intact.
Key Takeaways
- The 30-year Treasury yield just hit its highest level since 2007 and the 10-year its highest since late 2023, but Ryan and Sonu see this as normalization after years of near-zero rates, not a red flag.
- Two catalysts are driving the recent move: Middle East conflict keeping oil prices elevated, and the AI boom, where data center spending has shifted from company cash flow to new debt issuance, creating fresh competition for credit.
- This is inflationary growth, not stagflation: unemployment is at 4.1%, layoffs are near historic lows even adjusted for a larger workforce, and nominal GDP growth of 5-6% mirrors the late 1990s, when 10-year yields averaged around 6%.
- The pace of the yield move matters more than the level; a slow grind higher is manageable (as seen the past couple years with the S&P near record highs), while a sharp spike would be far more disruptive to markets.
Jump to:
0:00 — Airport Check in and Big Question
1:32 — Why Yields Are Moving Up
4:08 — Can Markets Handle Higher Rates
6:05 — Inflationary Growth Without Stagflation
8:55 — What It Means for Portfolios
Connect with Ryan:
- LinkedIn: Ryan Detrick
- X: @ryandetrick
Connect with Sonu:
- LinkedIn: Sonu Varghese
- X: @sonusvarghese
The views stated in this podcast are not necessarily the opinion of Cetera Wealth Services, LLC, or CWM, LLC. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Ryan Detrick and Sonu Varghese are non-registered associates of Cetera Wealth Services LLC.
A diversified portfolio does not assure a profit or protect against loss in a declining market.
Please note: Cetera Wealth Services, LLC is not registered to offer direct investments into commodities or futures. Instead, we provide access to this asset class via mutual funds, exchange-traded funds (ETFs) and the stocks of associated companies. Investments in commodities may be affected by the overall market movements, changes in interest rates and other factors such as weather, disease, embargoes and international economic and political developments. Commodities are volatile investments and should form only a small part of a diversified portfolio. An investment in commodities may not be suitable for all investors.
The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their original value.
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