Wharton professor Jeremy Siegel warns rates are near levels that could derail earnings-fueled stock gains

Wharton professor Jeremy Siegel warned that interest rates are nearing levels that could disrupt stock gains driven by earnings. Speaking on CNBC, Siegel pointed to bond yields close to historically challenging territory for equities, citing the 10-year inflation-adjusted Treasury yield, which rose to 2.43% by the end of July, based on Federal Reserve data. He focused on the spread between that inflation-adjusted Treasury yield and the inflation-adjusted market yield, which he estimated at around 5%. While he said stocks may still have the edge on returns if real yields stay lower, he cautioned the appeal of equities could fade if rates move higher. He also noted higher rates could limit how much earnings can offset bond-market moves.