The Case for (still) Higher Treasury Yields
After one of the worst starts to a year for fixed income, returns may not get much better from here. Long-term interest rates have traded sideways recently but we expect rates to potentially rise further, which would put downward pressure on bond prices. We’re not giving up on high-quality fixed income though, as Treasury securities have shown to be the best diversifier during times of equity market stresses. Ryan Detrick, CMT, Chief Market Strategist, LPL Financial, says, "We think high-quality bonds—despite higher interest rates—can play a pivotal role in portfolios as they remain the best diversifier to equity risk. Unforeseen events happen and it’s best to have that potential portfolio protection in place before it’s needed." Read more.