When will bonds get so attractive that investors can't resist? Survey says 6% 10-year yield
Bank of America's October survey found 6% is the key 10-year Treasury yield level that could prompt investors to shift from stocks to bonds
TL;DR
- 37% of investors surveyed by Bank of America would consider moving from stocks to bonds when the 10-year Treasury yield hits 6%.
- Another 14% cited 6.5% as the threshold, while 19% already believe yields are high enough to prompt a shift.
- The 10-year Treasury yield reached a 24-year high of 5.365% last week and was trading around 5.21% on Tuesday.
- Yields have risen due to investor concerns that higher oil prices and the war in the Middle East could increase inflation and lead to tighter monetary policy by the Federal Reserve.
- Higher Treasury yields make bonds more attractive relative to stocks and increase borrowing costs across the economy.
- Upcoming consumer and producer inflation data this week will provide further clues on yield direction.