Goldman Sachs economists expect that rates will continue to rise in the coming months.
Goldman analysts believe that stock valuations should be able to digest a 2% 10-year yield easily.
As such, they share 29 stocks that are still cheap within the high-absolute-valuation stock market.
After reaching a new 12-month high of 1.62% on Friday, 10-year Treasury yields retreated slightly to land at 1.61% as of Monday afternoon.
But interest rate volatility is unlikely to fade away anytime soon. The Cboe Interest Rate Swap Volatility index, which measures the implied volatility of Treasuries, was at its highest level since last March on Friday.
Goldman Sachs economists also expect that rates will continue to rise in the coming months, forecasting an 11% pace of real US GDP growth in the second quarter. As the economy continues to recover and reopen, they predict that the 10-year yield will rise to 1.8% by mid-year and 1.9% by year-end.
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