But longer-dated bonds have born the brunt of the pain. The iShares20+Year Treasury Bond exchange-traded fund is down more than 9 per cent in total returns.
Worst stretch in 65 years
Analysts calculate that on an annualised basis, long-term US bonds are suffering their worst stretch in 65 years.
Investors, who piled into bonds late last year – expecting that US inflation and interest rates would both fall sharply this year – have been badly wrong-footed as inflation has turned out to be a more recalcitrant foe than expected.
Back in January, investors were betting the Fed would deliver six or more 25 basis point rate cuts this year.
They expected the steep drop in official interest rates would push down yields, and lift bond prices, rewarding investors with capital gains and interest income.
Rate cut prospects dim
But as inflationary pressures show signs of strengthening, rather than ebbing, prospects for US rate cuts this year have…
