US Treasuries at 3%: Time to reconsider fixed income allocations

As ten-year US Treasuries hit 3%, it is time to start thinking out of the box, writes Brian Heyworth, global head of client strategy at HSBC Global Asset Management.

The yield on US 10-year Treasury bonds hit 3% for the first time since 2013 last week. Even though it is more symbolic than symptomatic of a broader shift in sentiment, it is nonetheless a significant event, which both comes from and reinforces the market's perception that inflation will pick up. What is happening with inflation and rates? This shift in the perception of inflation and rates has signalled an inflection point in investment markets. In fact, we think cyclical inflation pressures should continue to build gradually, particularly in the US. Even though the Federal Reserve...