Risky assets become riskier and more expensive
The corporate bond space doesn't seem to be biting to the higher rates narrative neither. Indeed since Biden won the election and a vaccine emerged, prices of high yields bonds rose incredibly fast. It means that even though rates are rising, investors listen to the frequent message coming from Federal Reserve speakers that yields will remain low for longer.
If rates rise too fast, they can pose a severe threat to the corporate world as higher rates increase funding risk for lower-rated corporates. If inflation increases as well, only companies that have the capability and flexibility to transfer rising costs directly to customers will be able to navigate the market, while others will be inevitably pushed out of business. It, therefore, makes sense to see investors such as Bill Ackman, founder of Pershing Square to bet against corporate credits.