Bond veteran turns bullish after six years
Bianco Research President Jim Bianco has turned bullish on US Treasuries for the first time in six years after yields climbed to their highest levels in nearly two decades.
The US 10-year Treasury yield rose to 5.27%, its highest level since 2007, amid rising oil prices and expectations that the Fed could continue raising interest rates. Bianco said yields above 5% have made the risk-reward profile of bonds more attractive.
Bianco said he would continue buying bonds if yields rise further, adding that current levels provide investors with a significant cushion. According to Bloomberg data, for interest income on a 10-year Treasury purchased at current levels to be completely offset by a price decline, the yield would need to rise to around 6% over the next year. If yields fall by one percentage point, the investment could generate a return of approximately 13%.
Comments