10-Year Treasury Yields Hit Highest Levels Since 2002
UBS Financial Services reports that elevated 10-year Treasury yields near 5.29% provide a carry cushion for income investors despite ongoing market volatility.
The benchmark 10-year Treasury yield remains near 5.29%, marking its highest level since 2002. While a weak September jobs report triggered recent volatility, UBS Financial Services reports that these elevated yields now provide a carry cushion that protects income investors from immediate capital losses.
Analysis indicates the 10-year yield would need to rise by approximately 65 basis points before capital losses offset earned income. Market participants are currently monitoring the Federal Reserve System, with a 67% probability of another rate hike in December.
Experts from UBS and the Schwab Center for Financial Research recommend that investors focus on short-maturity bonds, investment-grade corporate bonds, and high-yield indices. These strategies aim to capture attractive income while mitigating duration risk.
