NEW YORK — Wall Street moved Friday to reassure investors after the 10-year Treasury yield climbed to levels last seen in 2007, stressing that absolutely nothing useful can be learned from the last time borrowing costs were this high.
The benchmark yield briefly topped 5.2%, while the 30-year reached levels unseen since 2004 and mortgage rates returned to roughly 7%. Stocks responded by rising anyway, powered largely by enthusiasm for artificial intelligence.
“People hear ‘2007’ and immediately get nervous,” said one strategist. “But this is completely different. Back then investors were dangerously overconfident about a transformational financial innovation nobody fully understood.”
He paused.
“Anyway, have you seen these AI capex projections?”
Analysts emphasized that unlike 2007, today’s economy features resilient corporate profits, enormous government borrowing, expensive housing, rising long-term rates and trillions of dollars being deployed into assets whose ultimate cash flows remain somewhat theoretical.
“So really, almost no resemblance whatsoever,” the strategist clarified.
Markets appeared comforted, with investors continuing to buy technology shares while bond investors quietly demanded the highest compensation in nearly two decades to lend money to the United States government.
Economists also cautioned against reading too much into historical parallels, noting that financial crises never repeat exactly.
“History doesn’t repeat,” said one economist. “It rhymes.”
Wall Street immediately upgraded “rhyming with 2007” to Overweight.
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