From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
Long-term interest rates have taken a hit this week, while the short end of the curve has continued higher. When we zoom out a bit, yields have been rising across the curve since this summer.
During the past few months, the 2-year yield has ticked higher by more than 30 basis points (bps), the 5-year has increased by almost 60 bps, and the 10-year has gained 40 bps. But when we look all the way out to the 30-year, it’s only risen by roughly 20 basis points.
Rates are rallying across the board, Treasuries are trending lower, and bond market investors are favoring TIPS and higher-yielding securities.
How do we want to position ourselves in this kind of environment?
Well, we definitely don’t want to be buying Treasury bonds.
In today’s post, we’re going to take a trip around the fixed-income market and discuss some US Treasury funds we can use as vehicles to express our thesis. [Read more…]