By Davide Barbuscia
NEW YORK (Reuters) – A recent U.S. Treasuries rally, fueled by expectations of significantly lower interest rates, is overdone as the economy’s resilience may make it unnecessary for the central bank to lower borrowing costs by as much as the market bets, a BlackRock portfolio manager said.
However, the Fed should have started lowering rates last month to gradually shift toward easier monetary policy, he added.
U.S. Treasury yields, which move inversely to prices, have declined sharply after weak manufacturing data and employment data released last week sparked recession fears and a sharp repricing of bets on monetary policy for the rest of this year.
The rally has made Treasury valuations less attractive, said David Rogal, portfolio manager of BlackRock’s Fundamental Fixed Income Group, in an interview. “We have definitely been more favorable on bonds here but it’s hard to be too constructive at these…
