Bonds
BofA Says Buy US Treasuries That Have Lagged Broader Iran Rally
The US Treasury Department in Washington, DC.
Photographer: Alex Wroblewski/BloombergUS Treasuries are still pricing in a war in the Middle East that other asset classes have shrugged off, setting up a drop in yields as they catch up, according to Bank of America.
The bank’s strategists recommend buying the belly of the curve — which typically refers to mid-maturity bonds like the five-year — expecting them to rally as the market increases bets on Federal Reserve interest rate cuts. They recommend so-called steepener trades, which benefit when shorter-dated bonds outperform longer maturities.