According to Alessio de Longis, Senior Portfolio Manager at Invesco, US Treasury bonds offer greater investment value than European bonds amid rising prospects of Federal Reserve rate cuts and the restoration of Treasuries' traditional safe-haven status.

US Treasuries initially underperformed European government bonds following Trump's implementation of "Liberation Day" tariff policies in April, as this move shook confidence in the safety of US debt. However, de Longis stated that his overweight position, held since the beginning of the year, has been "powerfully vindicated" as declining US employment data has prompted expectations for more aggressive Fed easing.

"Foreign central banks are more advanced in implementing accommodative policies, and we believe the Federal Reserve still has room to lower interest rates," he said in an interview. "The reason fixed-income assets are performing well should be more signs of economic slowdown in the remaining months of this year."

A crucial test will come on Friday when Fed Chairman Powell delivers his highly anticipated speech at the Jackson Hole global central bank meeting. Market rate expectations indicate the Fed will cut rates twice by 25 basis points by year-end, and de Longis anticipates Powell will reference the possibility of a September rate cut.

"US labor market reports are increasingly becoming 'the most watched economic data,'" de Longis noted. He also stated that investors are "trying to shift more investments toward safer fixed-income assets."

Since the April shock, US Treasuries have regained favor, once again becoming the preferred safe-haven asset for global investors during market turbulence. JPMorgan Asset Management indicated that European bonds' "moment in the sun" has passed, as they view US government bonds as more attractive from a valuation perspective.

Schroders analysts noted this week that the European Central Bank's cautious approach to rate cuts "further suggests reducing exposure to European bonds."

On Thursday, the US 10-year Treasury yield remained relatively unchanged at 4.31%, approximately 30 basis points lower than levels reached in May. The yield spread between US Treasuries and German bonds has narrowed from nearly 200 basis points in June to about 155 basis points. On April 3, this spread was 137 basis points.