Treasuring Treasuries

2025-05-16 07:30:00 ET

Summary

• Investors have become disenchanted with investing in USTs, thereby causing their yields to climb in recent years to their highest levels since the beginning of the century. The yield on the 10-year U.S. Treasury bond, currently 4.431%, is almost 3.5 times the S&P 500 yield of 1.27%.
• The only way the U.S. government can induce sufficient investment in USTs is for their yields to be unusually high, because investors are currently interested in taking the greatest risks possible. This is one of the clearest signs that U.S. stocks are in a dangerous and unsustainable bubble which will be followed by a dramatic collapse.
• In recent weeks, there has been a sharp surge of stories about how the U.S. dollar will lose its role as the world's reserve currency, which is one of the most important reasons, especially for non-U.S. investors, to own USTs.
• An interesting question is which U.S. government bonds to purchase, given the wide range from 4-week U.S. Treasuries to TIPS and I Bonds.

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