“The Treasury market as a safe haven – – that bid is certainly back and then some as we begin 2014,” James Camp, a money manager at Eagle Asset Management, said in the article. “There’s a place for the most liquid asset class in the world.”
Some go so far as to project falling yields for 2014. For instance, Jeffrey Gundlach, chief executive officer of DoubleLine Capital LP, predicts yield will dip this year as banks pick up Treasuries to meet new regulatory requirements on collateral and as a safe-haven asset from political and economic troubles abroad.
Jason Brady, the managing director at Thornburg Investment Management, also argues that global growth concerns could begin to weigh on the U.S. and force the Fed to reverse its tightening stance.
“Ultimately, they’re going to feel like they need to do more,” Brady said in the article. “A month ago everybody was like ‘the U.S. economy is fabulous, everything’s wonderful, this is awesome, we like everything.’ Here we are one month later and everyone’s all concerned.”
While bond prices strengthened this year, a popular hedge against Treasuries plunged. The ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT), which provides double the inverse returns of long-term Treasuries, has declined 14% year-to-date. However, investors may utilized the fund as a short-term hedge if rates rise again. [Inverse Treasury ETFs Help Hedge Against Rising Rates]
For more information on Treasuries, visit our Treasury bonds category.
Max Chen contributed to this article.