BlackRock turns tactically neutral on long-term Treasuries

Treasury bonds is shown on the conceptual business photo — Andrii Dodonov/iStock via Getty Images

BlackRock revealed Monday that it has turned tactically neutral towards long-term Treasuries, as markets price in a higher-for-longer Fed policy. Meanwhile, the firm also stayed underweight strategically.

“We had been underweight long-term Treasuries on a six- to 12-month tactical horizon for now three years, but now we’re turning neutral,” BlackRock stated in an investor note.

U.S. bond yields have been knocking on the door of 16-year highs and BlackRock stated that it goes to show that yields are adjusting to this new regime of greater macro uncertainty and higher interest rates.

“A pause in the long-term yield surge doesn’t mean that we see yields falling sharply from here. Nor does it mean that this is a step toward us turning overweight long-term Treasuries,” the firm added. “On a strategic horizon, we’re starting to think that we could see 10-year yields at 5% or higher at some point.”

In Monday’s afternoon trading, the U.S. 10-Year Treasury yield (US10Y) has advanced 10 basis points to 4.71 See the live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

For investors looking to further analyze the U.S. Treasury market, they can shift their attention towards Treasury-based exchange traded funds. Listed below are a handful of funds across multiple maturity dates: