In August 2020, the US 10-year government bond yield sat at just 0.5 per cent. That was arguably peak cheap money – the apogee of the “low-rates-for-long” paradigm. Fast-forward a few years, and the US 10-year yield pierced a staggering 4.8 per cent this week, a gigantic lift from the 3.3 per cent level that prevailed as recently as April 2023.

This sent shockwaves through lackadaisical valuations of asset classes that price off this risk-free “discount rate”, including listed equities, venture capital, infrastructure, real estate, junk bonds and private credit, which are only reluctantly adjusting to the new normal of structurally elevated cash rates.