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Bonds are paying the best yields in years and still dragging portfolios into the red, leaving investors scrambling for a defensive asset that actually defends. A growing group of Wall Street managers thinks the answer involves shorting Treasuries outright.
U.S. bond yields are rising, providing an increasingly attractive alternative to pricey stocks. Trump's unorthodox policy may be causing this trend to accelerate.
The iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) is rated 'Hold' due to its 7% yield and short 2.33-year duration, despite technical and credit headwinds. SHYG's price remains in a marked downtrend, with CCC spreads at three-year highs and Moody's raising default projections, signaling elevated credit risk. Technical entry is advised only above $41.70 or after a return above key moving averages; support at $40.83 is critical for current holders.
The global competition for capital remains the key dynamic keeping yields elevated. Notably, all of the September increase in 10-year Treasury yields came from real yields, as implied by the TIPS market.
Japan, Europe, and the U.S. were feeling the fallout from France, where yields on its benchmark 10-year note climbed closer to 5%, the highest since 2002.
Rolling coverage of the latest economic and financial news
US Treasuries rebounded from the global bond selloff that raced through European markets on Thursday, pulling 10-year yields back from a 24-year high. Bloomberg's Ira Jersey joins to discuss.
The bond market is flashing a signal that hasn't been present in almost two decades: the benchmark 10-year Treasury yield climbed above 5.25% on Sept. 28, 2026, cementing levels reached last week that are as high as any since the middle of 2007.