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U.S. government debt also faces the specter of losing an important catalyst that has lifted the asset class for much of this year.
“U.S. Treasuries are becoming less attractive to non-U.S. investors, as the increased cost of currency hedging is wiping out the extra yield Treasuries offer. Finally, bonds tend to have higher correlations to stocks during periods when markets are concerned about Fed tightening, damaging their traditional role as portfolio diversifiers,” adds BlackRock.
For more information on the fixed-income market, visit our bond ETFs category.
iShares 20+ Year Treasury Bond ETF
Tom Lydon’s clients own shares of TLT.