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Balancing Safety and Return

Some treasuries have extended out the yield curve to pick up yield, but theyre likely to reverse those moves when Fed tightening seems imminent.

By Susan Kelly | Updated on November 11, 2013

Stubbornly low short-term interest rates have encouraged some corporate treasurers to reach for more yield by moving to longer-term investments or those with slightly lower credit quality. But the prevailing mode still seems to be caution, according to bankers and investment managers, with treasury teams putting a premium on safety rather than yield.

To the extent that companies have invested farther out the curve, they’re likely to unwind those investments before short-term rates begin to rise.

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