Goldman Sachs: 10-Year U.S. Treasury's Five-Year Rolling Return Worst in Over a Century, But High Yields Are Attracting "Bottom-Fishing" Capital
Goldman Sachs strategists reported on Thursday that the five-year rolling return for 10-year US Treasuries has fallen to its lowest level in over a century, with real returns as dismal as those seen after World War I, World War II, and during the 1970s stagflation. Despite this, according to EPFR data, US bond funds have recorded net inflows for 71 consecutive weeks, with short-term bond funds absorbing $139.9 billion and long-term bond funds absorbing $19.3 billion. Bob Michele, Chief Investment Officer at JPMorgan Asset Management, stated that he has begun buying long-dated Treasuries, believing current prices are "extremely cheap." The new Federal Reserve Chair, Warsh, announced the first interest rate hike in three years this week to combat persistently above-target inflation pressures, emphasizing that the 10-year US Treasury is "the most important asset globally."
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