Moreover, the last time 10-year Treasuries were this cheap relative to short-term debt in September, U.S. government debt rallied over the following three months.
“There’s a good chance yields are going to crest here,” Robert Tipp, chief investment strategist in Prudential Financial’s fixed-income unit, said in the Bloomberg article.
Tipp now argues that long-term Treasuries look more attractive after the global rout in bonds over the past few months. Specifically, the so-called term premium currently shows that 10-year Treasuries provide a 0.5 percentage points more yield than short-term debt. The last time this happened in September, the notes returned 3.6% in the following three months for their best quarterly gain since 2012.
iShares 7-10 Year Treasury Bond ETF
For more information on the Treasuries market, visit our Treasury bonds category.
Max Chen contributed to this article.