Investors may be underestimating Donald Trump‘s potential push for fiscal discipline, making long-term bonds and rate-sensitive sectors an attractive bet, according to Bank of America’s chief investment strategist Michael Hartnett.
In his flagship ‘The Flow Show’ report published Friday, Hartnett shifted to a bullish stance on bonds, stressing that the yield spike seen in recent months has created an opportunity.
“20-year corporate bonds now yielding 6.3%, pension funds would be looking to park some of those gains in bonds,” he said, recommending investors “buy long duration bonds.”
Hartnett indicated the case for duration bonds – as commonly tracked by the iShares 20+ Year Treasury Bond ETF TLT – is strengthening as U.S. government spending slows, the Federal Reserve keeps a cautious stance on inflation, and yields approach peak levels.
Is The Bond Bear Market Peaking?
The past two years have…
