Alain Bokobza, head of global asset allocation at Societe Generale, identified 5% and 6% as critical yield thresholds for 10-year Treasury bonds. Reaching 5% creates downward pressure on equity valuations, while 6% represents a structural threat to stock markets.
Current 10-year Treasury yields hover around 4.1%, with market expectations suggesting a potential rise to the 4.7%–4.8% range. Strategists generally view the 4.8%–5% zone as a point where risks of asset spillover increase.
Despite these warnings, Societe Generale maintained an overweight position on stocks as of December 2025, focusing on US and European markets. Conversely, the bank holds an underweight position on bonds and Treasuries, as it does not find them attractive despite rising yields.
The bank highlights three channels of impact: valuation compression due to higher discount rates, reduced net income for companies with floating-rate debt, and behavioral shifts where investors reallocate capital from equities to fixed income.
Sectors most vulnerable to these dynamics include real estate, utilities, and capital-intensive industries. Persistent government deficits and continued bond issuance are cited as key factors exerting upward pressure on yields, independent of Federal Reserve policy.