Traders beware of rising red lines: a 10-year US Treasury yield breaking 6% is the real red line for individual investment portfolios.

The yield on 10-year US Treasury bonds has fallen from around 5% after digesting the CPI data, but the latest survey shows that traders are willing to wait until the yield breaks through 6% or even higher before adjusting their personal positions.

On Friday, falling oil prices caused long-term Treasury yields to decline slightly, but the US Treasury yield curve surged across the board this week, with short-term Treasury yields plummeting.

The yield on 2-year U.S. Treasury bonds climbed 28 basis points to over 4.60%, while the yield on 10-year U.S. Treasury bonds rose to 4.988%, approaching the 5% mark, and the yield on 30-year Treasury bonds reached about 5.38%, the highest level since 2007.

According to a recent Markets Pulse survey by Bloomberg on September 11, about one-fifth of respondents said that a yield of slightly more than 6% on 10-year U.S. Treasury bonds would trigger an alarm in their personal portfolios and prompt them to reduce their stock holdings.

The median response rate among the 122 participants was 6.5%, with the 6% to 6.24% range receiving the most votes. More than half of the respondents believed that the yield needed to rise to between 6% and 8.24% before they would make substantial adjustments to their personal holdings.

This result differs significantly from traders' overall assessment of the market and has direct implications for the short-term trend of the stock market— although yields remain high, the threshold for triggering individual selling behavior may be higher than the market previously expected.

There is a significant discrepancy between individual portfolio and institutional judgments.

The survey was conducted from September 8th to 10th, collecting 122 valid responses. The data reveals a significant difference between institutional judgment and individual behavior among traders.

When assessing the threshold at which the 10-year Treasury yield would trigger a 10% drop in the S&P 500, more than three-quarters of respondents pinpointed the range of 5% to 5.75%.

However, when the question shifted to individual investment portfolios, the tolerance threshold of the same group of respondents rose significantly, with a median of 6.5%.

In response, a Bloomberg investigation points out that this divergence may stem from fundamental differences in risk-taking mechanisms: institutional investors who manage other people's assets face accountability pressures, while individual investment decisions do not carry the risk of being fired for making mistakes. Therefore, investors are often willing to take on higher risks with their own funds.

It is worth noting that retail investors accounted for only 7% of the total number of respondents in this survey.

The pace of yield increases is more crucial than the absolute level.

Bloomberg analyst Tatiana Darie previously pointed out that the speed at which yields rise is more impactful to the market than the absolute level they reach, and the data from this Pulse survey confirms this assessment.

Based on the survey distribution, eight respondents who chose a level of 10.5% or higher were grouped into a separate statistical interval.

This long-tail distribution suggests that some market participants have a considerable tolerance for extreme interest rate scenarios, which also means that in the event of a rapid rise in yields, the market shock may be far greater than the absolute level itself implies.

The yield on 10-year US Treasury bonds fell from around 5% after the latest CPI data was released, easing short-term pressure. However, if the yield resumes its upward trend and quickly approaches 6%, individual investors may engage in portfolio adjustments, which could exert more significant downward pressure on the market.

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