Treasury yields are running hot. Here are opportunities for income-seeking investors
Long-dated Treasury yields hit key levels last week. Investors can turn up attractive income amid the volatility.
TL;DR
- The 30-year Treasury yield exceeded 5.31% and the 10-year yield surpassed 4.7% last week, with bond yields moving inversely to prices.
- The Treasury Department plans to increase government bond purchases to stabilize the long end of the yield curve.
- Factors contributing to rising long-term yields include the national debt, corporate bond issuance for AI, and inflation concerns.
- Opportunities for income are available across the yield curve, with a focus recommended on the front and intermediate parts (1- to 10-year maturities).
- Diversification into non-U.S. debt, preferred securities, and Treasury inflation-protected securities is advised.
- Liability-driven investing can hedge future cash flows by matching bond maturities to specific future expenses.