Are rising US treasury yields behind us?

Long-term case for low yields is intact

The ten-year US treasury yield broke through the psychologically important 3% threshold earlier this quarter - the highest level in four years. Has this created a buying opportunity or is it a falling knife?

Given the recent momentum, investors have been justifiably worried about spiralling rates. However, the recent yield rise mostly results from cyclical factors. The structural macro backdrop has not changed much. The long-term case for low yields is intact. Even cyclically speaking, the support for higher US yields is already weakening. While it is notoriously difficult to call the peak in yields, this suggests to us the bulk of rate move is behind us. At the same time, valuation and return potentials have improved significantly. Cyclical moves versus structural shifts Investors ofte...