Long-End U.S. Treasury Yields Attractive but Investor Conviction is Low

Dow Jones
08/20

0526 GMT - Long-end U.S. Treasury yields are attractive in real and nominal terms, but low investor conviction could leave yields under sustained pressure in the near term, TD Securities' Gennadiy Goldberg and Molly Brooks say in a note. "For long-end pressure to abate, we believe the market needs some combination of the Fed sounding more credible on inflation, Treasury hinting more strongly at decreasing long-end supply, investor demand improving, IG supply moderating, or growth concerns resurfacing," the strategists say. The U.S. Treasury said Wednesday it will buy back more of its longer-term bonds, in an effort to curb a sharp increase in borrowing costs.

 

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