We are cautious on U.S. Treasuries in the short term after the recent rally. Yet, we still advocate exposure to build portfolio resilience. Scott explains.
U.S. Treasury yields dropped sharply in March, breaking out of the tight range they had traded in early this year. Could yields head lower still, extending the rally in Treasury prices? We take a cautious short-term stance, and see recent moves as excessive. Yet, we still like U.S. Treasuries for their key role as portfolio diversifiers.
Just one illustration of the extent of the recent rally: The 5-year U.S. Treasury