“Without inflation expectations falling, it would be tough for 10-years (Treasuries) to rally much further,” Justin Hoogendoorn, fixed income strategist at BMO Capital Markets, said in a Reuters report.
Meanwhile, other safe-haven hedges have not been working out as well. For instance, gold prices remain stuck in the low to mid $1,600 range. The SPDR Gold Shares (NYSEArca: GLD) is down 1.1% over the past month. Gold spot price was $1,662 Monday.
Additionally, the CBOE Volatility Index, or VIX, is still on a down trend, currently trading at 17.3, below its historical average. This suggests more complacency within the stock markets or higher stability with current prices. Consequently, the iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) is down 5.9% over the past month and the fund has dropped 54.4% year-to-date. [How Rising Rates Could Impact Stock ETFs]
Gary Gordon at ETF Expert thinks Treasury bonds are “seriously overvalued.”
“For the first time since the start of 2008, bonds were the only investments to provide positive returns amid renewed concern the global economy is slowing and as widening deficits in Europe threaten contagion,” Bloomberg News reported this week.
iShares Barclays 20+ Year Treasury Bond
For more information on U.S. Treasuries, visit our Treasury bonds category.
Max Chen contributed to this article.