Bond investors are eyeing Treasurys (^TYX, ^TNX, ^FVX) as a safe haven, particularly with concerns over the Federal Reserve's stance.
Cetera Financial Group chief investment officer Gene Goldman joins Morning Brief to discuss the current attractiveness of Treasurys despite rising yields and the growing role of both retail and foreign investors in the market.
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It feels like bond investors are coming in because they feel that the Fed is not going to, like there's bond vigilante activity potentially happening under the hood here. Does that play into how you think about advising people to own treasuries across the yield curve? Does that play into whether or not it's a safe asset for investors right now?
Yeah, we still think yields are going to move up a little bit, but we still think it's a very safe asset. We're very apprehensive of high yield. High yield spreads are widening, and we're clearly seeing signs of uncertainty. They're still well below long-term averages, but treasuries, again, offer that ballast in a portfolio. Simple example, you go back to 2008, one of the things that only did well, that mitigated against volatility were treasuries. And with all this settled, let's say the tariff issue gets settled, let's say, you know, fingers crossed, but let's say it gets settled, the key thing to think about is that treasuries are pretty attractive. We're about two percent over inflation. We have a lot of retail buying of treasuries. We have a lot of foreign investors buying treasuries. Like 27 percent of treasuries are being bought by foreign investors. There's still significant demand. And if I'm going to get two percent over inflation on treasury yields on a ten year, it's an opportunity.