By 1. The U.S. economy continues to show strong growth, and the Fed has indicated two additional rate hikes in 2018. As a result, short-term interest rate will continue to rise.
2. Trade uncertainty should keep a lid on longer-term rates, which means the yield curve should continue to flatten.
3. Short-term bonds have attractive yields with a lower level of interest rate risk. Given the flattening of the yield curve, short-term bond yields are at their highest since 2009, which presents value for investors as they can bear less interest rate risk while earning attractive carry.
