“The biggest flow story right now is money gravitating toward extending duration on Treasuries,” BofA noted.
The data indicates that fund managers, who expect bonds to rebound when the predicted recession hits, have continued to buy even as prices have fallen, pushing up yields.
Long-term Treasury notes have been sold off heavily in recent months and the yield on 10-year notes – which moves inversely to their price – hit a 16-year high of 5.021% this week.
Analysts point to a series of factors that have weighed down bond prices. Among them, the increase in the supply of public debt to finance the deficit, reinforced by the reduction of the Federal Reserve’s bloated balance sheet and the growing uncertainty, which makes investors demand higher returns to hold long-duration notes, the so-called premium. per term.