Amid a resilient U.S. economy, bond investors are adjusting to prolonged higher interest rates, shifting their strategies away from recession expectations.

Investor Moves

•  Some investors are reducing bets on safe-haven assets like Treasuries

•  Felipe Villarroel from TwentyFour Asset Management is reallocating from 10-year Treasuries to 10-year U.S. investment-grade corporate bonds

Economic Indicators 

•  Unemployment rate remains low; growth is consistently above trend

•  Long-term yields have spiked, with the 10-year benchmark reaching a 10-month high

Factors Influencing Bond Investors

•  Bank of Japan’s shift in yield curve control policy

•  Concerns about U.S. debt sustainability

•  Large funding requirements announced by the Treasury