Traders are also expecting the Federal Reserve to hold off on any further interest rate hikes in response to the uncertainty, especially if U.S. growth momentum slows, which should help support fixed-income assets. Fed funds futures – a popular tool to place bets on the Fed’s future policy moves – showed a 6% probability that the Fed may even cut interest rates this year.
The Brexit vote “provides rationale for central banks to run a looser policy,’’ Steven Major, global head of fixed-income research at HSBC Holdings PLC, told the WSJ. “For the U.S., the hikes have been correctly priced-out.”
Bond investors interested in Treasury bond exposure have a number of ETF options available.
Intermediate-Term Treasury ETFs:
- Vanguard Intermediate-term Bond ETF (NYSEArca: BIV)
- iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF)
- iShares 3-7 Year Treasury Bond ETF (NYSEArca: IEI)
- Vanguard Intermediate-Term Government Bond ETF (NYSEArca: VGIT)
- Schwab Intermediate-Term U.S. Treasury ETF (NYSEArca: SCHR)
- SPDR Barclays Intermediate Term Treasury ETF (NYSEArca: ITE)
Long-Term Treasury ETFs:
- iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT)
- iShares 10-20 Year Treasury Bond ETF (NYSEArca: TLH)
- Vanguard Extended Duration Treasury ETF (NYSEArca: EDV)
- Vanguard Long Term Government Bond (NasdaqGM: VGLT)
- SPDR Barclays Long Treasury (NYSEArca: TLO)
- PIMCO 25+ Year Zero Coupon US Treasury (NYSEArca: ZROZ)
For more information on the Treasuries market, visit our Treasury bonds category.