Don't Let The Bond Market Spook You

Long-term Treasury yields have surged, with the 30-year eclipsing 5.33%, driven by increased government and corporate issuance and fiscal deficits. Rising yields reflect not only inflation and supply concerns but also accelerating economic growth, as evidenced by improving LEI and business activity indices. Current yield levels may represent a normalization, with 10-year and 30-year yields likely peaking at 4.75–5.00% and 5.50%, respectively, over the coming year. Investors can capitalize on positive real yields across the curve, with potential for attractive total returns in longer-dated bonds during future market downturns.