(Bloomberg) — Bond investors face the crucial decision of just how much risk to take in Treasuries with 10-year yields at the highest in more than a decade and the Federal Reserve signaling it’s almost done raising rates.
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While individuals are piling into cash, for many portfolio managers the debate now is about how far to go in the other direction. Two-year yields above 5% haven’t been this lofty since 2006, while 10-year yields eclipsed 4.5% on Friday for the first time since 2007.
For Ed Al-Hussainy at Columbia Threadneedle, the sweet spot now is in the shorter-dated notes, which would likely perform well in the event the Fed pivots to rate cuts within a couple years. That maturity also avoids the added risk of longer tenors, which have delivered the most pain to bond investors in 2023 as yields surged broadly amid a resilient economy and swelling Treasury issuance.
“Unless you think the Fed’s going to be on hold for two years,” yields above 5%…
2023-09-23 15:00:00
Article from finance.yahoo.com
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