By Saeed Azhar and Davide Barbuscia
NEW YORK (Reuters) – A sharp selloff in U.S. bonds so far in April is prompting some investors to consider allocating more funds to the asset class to lock in higher yields ahead of interest rate cuts by the Federal Reserve, a prospect that remains investors’ base case despite U.S. economic resilience.
Treasury yields, which move inversely to prices, have soared in recent weeks after a string of solid economic data and three consecutive monthly inflation prints showing a rebound in price pressures pushed out expectations of when the Fed would start cutting rates. The benchmark 10-year yield has approached 5% – a level last touched in October for the first time in 16 years.
But for many, lower bond prices are an opportunity to increase so-called duration – or the interest rate sensitivity of a bond portfolio – because the U.S. central bank has signaled the next likely move in interest…
