Nothing good happens when the yield on the U.S. 10-year Treasury note trades above 4.5%, Fidelity’s Director of Global Macro Jurrien Timmer said Friday.

“Long-term bond yields are on the move again, with the 10-year yield well into the danger zone at 4.73%. As I have written many times, recent history suggests that nothing good happens above 4.5%,” he noted.

The rise in yields could be driven by several factors, Timmer explained.

One possibility is a reverse “crowding out” effect: rather than heavy government borrowing squeezing out private-sector investment, insatiable demand for financing from AI companies may be diverting investor appetite away from Treasuries.

Another explanation is growing skepticism that a hawkish Federal Reserve will back its rhetoric with meaningful action. Alternatively, the move may reflect the consequences of a less transparent Fed, as reduced clarity tends to increase uncertainty and push up risk premia.

“Less transparency means more uncertainty, and more uncertainty usually means high risk premia. Either way, we have a bear steepening on our hands,” he noted.

Hardening bond yields often create a headwind for stocks and emerging technologies such as cryptocurrencies.