At the beginning of this year, US Treasury yields were sharply turned by the Federal Reserve, risk sentiment continued to rise, and the market firmly believed that the bond market would be bullish this year.
But since the beginning of this year, the U.S. economy is still resilient, inflation exceeds expectations, the urgency of the Federal Reserve to cut interest rates has declined, market expectations for interest rate cuts have continued to fall, the U.S. 10-year Treasury yield**, bond market bulls are facing losses again, as of press time, the U.S. 10-year Treasury yield has increased from 3 at the beginning of the year8% to the current 42%。
On March 4, ** reported that some investors had lost confidence in the U.S. Treasury market due to recent data. Capital Group issued a document sayingIf the economy continues to heat up and the Fed does not cut interest rates this year, the possibility of Treasury yields reaching 5% again cannot be ruled out
Wall Street news mentioned that Torsten Slok, chief economist of the American private equity giant Apollo Management, released an article entitled "The Federal Reserve will not cut interest rates in 2024", the article said that the U.S. economy not only did not slow down, but re-accelerated, and inflation began to **, which will prevent the Fed from cutting interest rates in 2024. In an interview, Fidelity International said he had sold most of the U.S. Treasuries given the continued growth of the U.S. economy. After a brief bullish on US Treasuries in January, Quant alpha***x also began to shift to selling US 10-year Treasuries.
But for those investors who are convinced that the Fed will eventually start cutting interest ratesU.S. Treasury yields** to 45% or even 5% will be their layout opportunities.
PIMCO (Pacific Investment Management Corporation), TCompanies such as Rowe Price, German asset manager DWS and BNY Mellon Wealth Management believe that bond yields could rise further in the short term, thoughBut in the long run, bond yields will start to fall as the Fed cuts interest rates。If the yield on 5 to 10-year Treasury bonds rises to 45%, that would be a great time to enter.
Michael Cudzil, portfolio manager at PIMCO, said the U.S. inflation data was down sharply from last year's peak of 5% Treasury yields, so "if the 10-year Treasury yield reaches 4."5% would be similar to last year's 5% peak, which is a good ** point. ”
This week, Fed Chairman Jerome Powell will appear before Congress on the semi-annual monetary policy report, followed by the release of the February non-farm payrolls report by the US Department of Labor, which will be closely related to interest rate cut expectations and will also determine the subsequent direction of US Treasuries.
t.Steve Bartolini, a portfolio manager at Rowe Price, said that if Powell said that the Fed will start cutting interest rates in the second half of the year, then this could once again catalyze the market's interest rate expectations. If this is accompanied by a continued hot job market, then this means that the 5-10 year Treasury yield** will reach 4After 5% began to turn down:
Ahead of this month's Fed policy meeting, a series of employment and inflation data releases may provide opportunities for bond investors.George Catrambone, head of the fixed income division at DWS, said that long-term U.S. bonds more accurately reflect the Fed's policy path than short-term Treasuries
"Even at the current level of interest rates, the longer the bond maturity**, the more accurate it is, because long-term Treasuries are closer to the Fed's view of the policy outlook for this year.'"