{"id":439580,"date":"2026-10-07T08:00:07","date_gmt":"2026-10-07T01:00:07","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/two-veteran-bond-bears-turn-bullish-on-long-treasuries-as-yields-top-5-439580\/"},"modified":"2026-10-07T08:00:07","modified_gmt":"2026-10-07T01:00:07","slug":"two-veteran-bond-bears-turn-bullish-on-long-treasuries-as-yields-top-5","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/two-veteran-bond-bears-turn-bullish-on-long-treasuries-as-yields-top-5-439580\/","title":{"rendered":"Two veteran bond bears turn bullish on long Treasuries as yields top 5%"},"content":{"rendered":"<div>\n<p dir=\"ltr\">Oil remains the swing factor. Higher diesel and gasoline prices from the Middle East conflict feed directly into inflation expectations, and one strategist quoted by <a href=\"https:\/\/www.barrons.com\/articles\/bonds-treasuries-yields-interest-rates-46c826d4\" rel=\"follow\">Barron&#8217;s (may be gated)<\/a> described oil as a wild card for US rates. That means any long-bond rally is hostage to Gulf supply headlines, much as <a href=\"https:\/\/investinglive.com\/stocks\/goldman-sachs-sees-five-drivers-behind-us-rates-selloff-says-move-may-be-overdone\/\" rel=\"follow\">Goldman Sachs suggested in its note<\/a>. Strong inflows into long-duration funds during a record losing streak show that real money is willing to buy weakness, which could slow the selloff even if it doesn&#8217;t reverse it. Against that, a Fed on a tightening path, heavy issuance and AI-related corporate borrowing keep upward pressure on yields, so volatility is likely to stay high.<\/p>\n<p dir=\"ltr\">&#8211;<\/p>\n<p dir=\"ltr\"> Long Treasuries are having their worst run on record, which is exactly why two of their longest-standing critics have decided it is time to buy.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>Two strategists who have avoided major-economy government bonds for years now recommend long-dated US Treasuries, Barron&#8217;s reported<\/li>\n<li>The roughly $47 billion iShares 20+ Year Treasury Bond ETF has fallen for 10 straight days, its longest losing streak, yet has drawn around $5 billion of inflows this year<\/li>\n<li>One strategist argues the Fed will ultimately cut rates to protect government finances, a view Barron&#8217;s warns could backfire by undermining central bank independence<\/li>\n<li>The other says current yields, about 5.3% on the 10-year and about 5.6% on the 30-year, make the bonds worth owning<\/li>\n<li>Risks include large deficits, war costs, inflation near 3%, AI-related corporate borrowing and rising fuel prices<\/li>\n<\/ul>\n<p dir=\"ltr\">\n<p dir=\"ltr\">Two strategists who have long steered clear of government bonds are now making the case for long-dated US Treasuries, even as the market for them suffers one of its worst runs on record, Barron&#8217;s reported.<\/p>\n<p dir=\"ltr\">One, a research firm co-founder who has advised against major-economy sovereign debt since 2022, recommended 10- and 30-year Treasuries in a note this week. Another, the founder of a US research house, turned positive on long-duration government debt last week for the first time in six years.<\/p>\n<p dir=\"ltr\">Their shift comes amid heavy losses. The roughly $47 billion iShares 20+ Year Treasury Bond ETF has fallen for 10 straight trading days, its longest losing streak ever. Even so, investors betting on a rebound have poured money in, taking the fund&#8217;s inflows to around $5 billion for the year after outflows as recently as August.<\/p>\n<p dir=\"ltr\">The bullish case runs against market expectations that the Federal Reserve will keep raising rates. Consensus sees the fed funds rate, now targeted at 3.75% to 4%, rising to at most 4.75% by the end of 2027. However, the Fed&#8217;s own projections released last month showed most policymakers expect rates below 4.25% in 2027.<\/p>\n<p dir=\"ltr\">The first strategist argues lower rates are coming partly because a widening budget deficit will push the Fed to protect government and banking system solvency. Barron&#8217;s cautioned that a central bank seen to be easing to fund government borrowing would damage confidence in its independence, likely pushing yields higher rather than lower.<\/p>\n<p dir=\"ltr\">The second strategist&#8217;s argument is simpler: yields are now high enough to make the bonds worth holding. The 10-year yield settled at about 5.3% on Tuesday and the 30-year at about 5.6%.<\/p>\n<p dir=\"ltr\">The risks remain substantial. Barron&#8217;s pointed to swelling federal debt, the cost of war, inflation near 3%, competition from corporate borrowing to fund AI investment and rising fuel prices. For patient investors willing to ride out volatility, however, the publication concluded that long Treasuries now look compelling.<\/p>\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Oil remains the swing factor. Higher diesel and gasoline prices from the Middle East conflict feed directly into inflation expectations, and one strategist quoted by Barron&#8217;s (may be gated) described oil as&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-439580","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=439580"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439580\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=439580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=439580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=439580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}