- ORIGINAL NEWS
This shift in the Treasury market may set investors up for solid gains
- SUMMARY
There is a shift in investor sentiment toward intermediate-term Treasury bonds.
More investors are buying bonds with maturity rates between 3 and 5 years, anticipating the peak of interest rate increases and lower rates in the future.
This differs from last year’s focus on short-term bonds and money market funds.
David Botset, head of innovation and Stewardship at Schwab Asset Management, believes intermediate-term bonds offer higher yield and price appreciation as rates decline.
However, Nate Geraci, president of The ETF Store, cautions against betting heavily on the Fed’s next move.
He believes that the Fed’s battle against inflation may not be over and advises against going too far out on the yield curve.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“People are starting to realize that we’re kind of at the peak of interest rate increases.”
“When interest rates come down at such point, you not only get the income from that [intermediate-term] bond, you get price appreciation because yields and prices of bonds are the inverse.”
Negative
“Nate Geraci, The ETF Store president, cautions against betting too heavily on the Fed’s next move.”
“Geraci believes the Fed’s battle against inflation isn’t over, and that could change the timeline for rate cuts.”