Nicholas Colas, chief market strategist at Convergex, said there are some similarities between now and August 2003, the last time this occurred, that are worth noting. The Fed was getting to the end of a rate cycle that had bottomed at a 1 percent rate. Ten-year Treasurieswere in “hard rally mode” going from over 5 percent yields in August 2003 to 3.6 percent in September 2003. And stocks were in decline from April 2003 to a low in September 2003.
“Basically, a similar picture to now. Bonds working and stocks falling,” Colas said, though he added that a big difference is “a dovish Fed back in 2003 and a theoretically hawkish one now.”