Rupert Harrison, senior adviser and portfolio manager at PIMCO, said at the TS Lombard economic conference in London on Tuesday that the recent sharp rise in U.S. Treasury yields has made them exceptionally attractive for allocation. This week, both 10-year and 30-year U.S. Treasury yields hit their highest levels in nearly 24 years, reflecting persistent market concerns about sticky inflation and widening fiscal deficits.
From a technical and valuation perspective, momentum indicators have moved deep into overbought territory after long-term U.S. Treasury yields surged to 24-year highs. Statements from top institutions such as PIMCO that they are increasing their duration exposure suggest that risk-free yields may be forming a medium- to long-term peak. A peak in yields often provides strong valuation support for risk assets.
For traditional macro financial markets, if U.S. Treasury yields retreat after their sharp rise, the improved relative value of Treasuries as an allocation would effectively offset some of the pressure from a pullback in U.S. technology stocks. Expectations for a stronger dollar and tighter liquidity may also ease, opening the door to a modest loosening of overall financial conditions.
For crypto markets, a peak in risk-free yields is often a technical precursor to a rebound in high-beta assets. As resistance emerges in long-term interest rates and liquidity pressures ease, incremental sidelined capital may have greater incentive to flow back into $BTC and large-cap tokens, lifting overall bullish sentiment.
#US10Y #BondMarket #MacroEconomics
From a technical and valuation perspective, momentum indicators have moved deep into overbought territory after long-term U.S. Treasury yields surged to 24-year highs. Statements from top institutions such as PIMCO that they are increasing their duration exposure suggest that risk-free yields may be forming a medium- to long-term peak. A peak in yields often provides strong valuation support for risk assets.
For traditional macro financial markets, if U.S. Treasury yields retreat after their sharp rise, the improved relative value of Treasuries as an allocation would effectively offset some of the pressure from a pullback in U.S. technology stocks. Expectations for a stronger dollar and tighter liquidity may also ease, opening the door to a modest loosening of overall financial conditions.
For crypto markets, a peak in risk-free yields is often a technical precursor to a rebound in high-beta assets. As resistance emerges in long-term interest rates and liquidity pressures ease, incremental sidelined capital may have greater incentive to flow back into $BTC and large-cap tokens, lifting overall bullish sentiment.
#US10Y #BondMarket #MacroEconomics