{"id":5717,"date":"2023-10-26T21:02:35","date_gmt":"2023-10-26T21:02:35","guid":{"rendered":"https:\/\/infundpros.com\/markets\/why-t-rowe-prices-cio-thinks-10-year-treasury-yields-may-keep-rising-and-how-hes-positioned-in-markets\/"},"modified":"2023-10-26T21:02:36","modified_gmt":"2023-10-26T21:02:36","slug":"why-t-rowe-prices-cio-thinks-10-year-treasury-yields-may-keep-rising-and-how-hes-positioned-in-markets","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=5717","title":{"rendered":"Why T. Rowe Price\u2019s CIO thinks 10-year Treasury yields may keep rising \u2014 and how he\u2019s positioned in markets"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002654395\" role=\"document\">\n<p>Ten-year Treasury yields may keep climbing over the next two to three months, after startling markets with their recent surge, according to Sebastien Page, chief investment officer and head of global multi-asset at T. Rowe Price.\u00a0<\/p>\n<p>\u201cWe are positioning for rising rates still,\u201d Page said in an interview Tuesday on the sidelines of Charles Schwab\u2019s Impact 2023 conference in Philadelphia. \u201cI don\u2019t think it\u2019s over,\u201d he said. \u201cWe do have a cash buffer.\u201d<\/p>\n<div class=\"paywall\">\n<p>The bond market has been rocked this year by a surge in 10-year yields that also has hurt equity valuations. The iShares Core U.S. Aggregate Bond ETF<br \/>\n        AGG<span>,<\/span><br \/>\n       which tracks an index of U.S. investment-grade bonds, has lost 2.2% this year on a total return basis through Tuesday, while the price of the S&amp;P 500 index<br \/>\n        SPX<br \/>\n       remains up 10.6% over the same period, according to FactSet data.<\/p>\n<p>Page sees a mix of several factors potentially pushing up the yield on the 10-year Treasury note, including economic growth that\u2019s been surprising to the upside, a shortage in labor supply in a still strong jobs market and an uptick in inflation expectations. He also cited factors such as increased issuance of Treasurys that the market will be absorbing to fund the U.S. fiscal deficit and the Federal Reserve\u2019s mantra of higher-for-longer interest rates as it tries to slow the U.S. economy to ease inflation.<\/p>\n<p>In his view, the Fed probably won\u2019t cut interest rates next year and the U.S. may experience a so-called soft landing where the economy slows without causing a recession.\u00a0<\/p>\n<p>But \u201cI don\u2019t think it\u2019s time to be a hero,\u201d he said, explaining that he\u2019s roughly neutral on stocks.\u00a0<\/p>\n<p>He said he is not yet willing to go overweight equities due to concern over the lag effect of the Fed\u2019s interest rates hikes, with higher borrowing costs likely to bite consumers and businesses.\u00a0<\/p>\n<p>Beyond being underweight in duration in the bond market and \u201clong cash,\u201d Page said he\u2019s overweight corporate credit, finding the roughly 9% yields in the junk bond market attractive.<\/p>\n<p><strong>Read:<\/strong> Economy gets off to good start in the fourth quarter, S&amp;P finds, as inflation cools<\/p>\n<p>Meanwhile, the yield on the 10-year Treasury note edged up to 4.840% on Tuesday, after climbing near 5% earlier this month to reach its highest level since July 20, 2007 based on 3 p.m. Eastern Time yields, according to Dow Jones Market Data. The 10-year Treasury yield<br \/>\n        BX:TMUBMUSD10Y<br \/>\n       was trading up on Wednesday morning at around 4.86%, FactSet data show, at last check.<\/p>\n<p>Cash-like Treasury bills, which have ultra-short-term maturities, have yields of more than 5%. For example, the yield on the one-month Treasury bill<br \/>\n        BX:TMUBMUSD01M<br \/>\n       was trading at 5.4% on Wednesday morning, according to FactSet data, at last check.<\/p>\n<p>The U.S. stock market finished higher Tuesday, with the Dow Jones Industrial Average<br \/>\n        DJIA<span>,<\/span><br \/>\n       S&amp;P 500<br \/>\n        SPX<br \/>\n       and Nasdaq Composite<br \/>\n        COMP<br \/>\n       all booking gains. The S&amp;P 500 snapped a five-day losing streak, although the index\u2019s 0.9% slump so far in October left it on track to potentially log a third straight month of losses, FactSet data show.<\/p>\n<p>Investors on Thursday will see an estimate from the U.S. government on growth in gross domestic product in the third quarter, with economists anticipating a 4.7% jump. Page said that he expects U.S. GDP in 2023 will rise more than 2%.<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/why-t-rowe-prices-cio-thinks-10-year-treasury-yields-may-keep-rising-and-how-hes-positioned-in-markets-5268675d?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ten-year Treasury yields may keep climbing over the next two to three months, after startling markets with their recent surge, according to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":5718,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":{"0":"post-5717","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why T. 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