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Deepening Bond Rout Has Some Investors Favoring the Short End

Yields on 10-year and 30-year Treasuries reached their highest since 2007, extending yield curve steepening which has been a key dynamic of the past month’s abrupt selloff.

By Liz Capo McCormick & Michael Mackenzie | October 09, 2023 at 10:59 AM
Photo: BlackRock headquarters at 50 Hudson Yards in New York City, on May 1, 2023. BlackRock headquarters at 50 Hudson Yards in New York City, on May 1, 2023.

Bond investors are coalescing around a segment of the Treasuries market that offers a measure of protection from this year’s brutal rout and also positions them for the recession that some still anticipate.

BlackRock Inc. and Columbia Threadneedle Investments are among firms favoring notes due in roughly one to five years as Treasuries head for a record third straight annual decline, led by losses in longer maturities. Those tenors in particular have been buffeted by a resilient economy and the government’s swelling borrowing needs.

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