Bond Traders Are Preparing for a 5% Yield, No-Rate-Cut World
- Schroders is shorting 2, 5, 10-year Treasuries on higher rates
- Ten-year yield has topped 4.5% for first time since November
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Bond traders are readying for 10-year US Treasury yields surpassing 5% as the scenario of no interest rate cuts by the Federal Reserve this year looks increasingly possible.
Schroders Plc is shorting US bonds across some tenors as sticky inflation raises the risk of higher-for-longer rates. Pacific Investment Management Co. expects the Fed to ease policy at a more gradual pace than peers in other developed markets, with a “non-negligible” chance that it doesn’t cut at all this year.