Many investors are focused on the sell-off in the stock market, but as you can see on the following chart, shares of the iShares 7-10 Year Treasury Bond ETF IEF are in a freefall. This ETF is designed to track bond prices.
The bond market is crashing and this should concern stock market investors.
Many large investment funds have huge holdings of treasury bonds. If the current sell-off in the stock market continues, it may result in margin calls. This could result in many of these funds selling stocks to raise the funds they need.
This could cause more selling in the equity market and the downtrend could continue.
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