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Goldman Sachs Has a Twist on the U.S.’s Favorite Bond Trade

  • Recommends shorting 10-yr Treasuries vs two- and 30-year bonds
  • Net short positions in long-dated bond futures at record high
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UBS's Cloherty Sees Treasury Yields Heading Higher
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Goldman Sachs Group Inc. is shaking up the most popular Treasury trade out there.

The Wall Street giant recommended in an Oct. 2 note that investors short 10-year U.S. bonds versus their two- and 30-year counterparts, a position that will benefit if 10-year yields rise more than the other two tenors. Traders have been piling into straightforward bets on steepening, a scenario that has received additional support as polls and betting websites indicate former Vice President Joe Biden’s odds of beating President Donald Trump are improving, burnishing the outlook for more stimulus.