U.S. Two-30-Year Treasury Yield Spread Has Room to Widen

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Samiat

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Nov 12, 2024
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U.S. Two-30-Year Treasury Yield Spread Has Room to Widen

It is somewhat surprising that longer-dated U.S. Treasury yields haven’t been under more pressure over the past few days, BlueBay CIO Mark Dowding says in a note. The asset manager continues to anticipate that the two-30-year Treasury yield curve should steepen materially over time, he says. That would imply a widening gap between two- and 30-year Treasury yields. “This is a position we are inclined to add to,” he says. Although this is a consensual view, the catalyst of the Trump sweep should have given this trade some added momentum, according to BlueBay. The two-year Treasury yield is trading at 4.321%, while the 30-year Treasury yield is at 4.579%, according to Tradeweb. BlueBay is part of RBC BlueBay Asset Management.

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Fixed-income investors are entering 2025 with a strong foundation, Columbia Threadneedle Investments’ Gene Tannuzzo says in a note. “With yields at attractive levels and the Federal Reserve in a supportive, rate-cutting cycle, bonds are well-positioned to generate healthy returns,” the asset manager’s global head of fixed income says. With the belief that the Fed will support the economy during periods of stress, bonds are regaining their critical role as portfolio

Bonds Seen Poised to Generate Healthy Returns in 2025
Fixed-income investors are entering 2025 with a strong foundation, Columbia Threadneedle Investments’ Gene Tannuzzo says in a note. “With yields at attractive levels and the Federal Reserve in a supportive, rate-cutting cycle, bonds are well-positioned to generate healthy returns,” the asset manager’s global head of fixed income says. With the belief that the Fed will support the economy during periods of stress, bonds are regaining their critical role as portfolio diversifiers, he says.