It's bad for the stock market because the support for equity erodes as capital rotates out of equity and into T-bills & bonds. It also drives up the interest r

It's bad for the stock market because the support for equity erodes as capital rotates out of equity and into T-bills & bonds. It also drives up the interest requirements on returns on capital thats loaned out to companies therefore compressing their margins, which in turn puts pressure on their equity. With less money to spend, businesses are more strategic in their capital spend (reducing B2B product purchases). It also should be mentioned that 5% is actually just above inflation so that yield is nominal and not actual returns. Inflation (Assuming at 3.7% going forward) that 5% is more like 1.3% real return on money. Worth reminding though the stock market IS NOT the economy.