Blackrock turn tactically neutral long-term Treasuries from underweight

BlackRock Investment Institute say that after being underweight long-term U.S. Treasuries since late 2020, as we saw
the new macro regime heralding higher rates, they’ve tweaked their view:

  • U.S. 10-year yields at 16-year highs
    show they have adjusted a lot – but we don’t think the process is over.
  • We now turn
    tactically neutral as policy rates near their peak.
  • The next step is not overweight: we
    see investors demanding more compensation for bond risk and stay underweight
    on a long-run, strategic horizon.
  • We downgrade high grade credit further


  • We now see about equal odds that Treasury yields swing in either direction. In other words, we see two-way volatility ahead.
  • The Fed is likely nearing the end of its fastest hiking cycle since the 1980s after raising rates into restrictive
  • We still see the Fed holding policy tight to lean against inflationary pressures.

This article was written by Eamonn Sheridan at Source