Bond traders are grappling with a counterintuitive loss as U.S. 10-year Treasury yields have risen more than three-quarters of a percentage point since the Federal Reserve began rate cuts in September. Despite a third consecutive rate cut by the Fed, 10-year Treasury yields hit a seven-month high as policymakers signaled a slower pace of monetary easing for next year. A strategy of betting on short-term Treasuries outperforming long-term counterparts has gained traction amid policy uncertainty. Bond investors face challenges from the Fed's likely prolonged pause on rate changes and potential economic turbulence under President-elect Donald Trump's policies, which could drive inflation.
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00:00It's Benzinga bringing Wall Street to Main Street.
00:02Fund creators are grappling with counterintuitive loss as U.S. 10-year treasury yields have risen
00:07more than three quarters of a percentage point since the Federal Reserve began rate cuts in
00:12September. Despite a third consecutive rate cut by the Fed, 10-year treasury yields hit a seven-month
00:18high as policymakers signaled a slower pace for monetary ease for the next year. A strategy of
00:24betting on short-term treasuries outperforming long-term counterparts has gained traction
00:29amid policy uncertainty. Bond investors face challenges from the Fed's likely prolonged
00:35pause on rate changes and potential economic turbulence under President-elect Donald Trump's
00:40policies, which could drive inflation. For all things money, visit Benzinga.com.