Minerd Sees ‘Buying Opportunity’ in Treasuries After Selloff

(Bloomberg) -- The rout in long-term Treasuries is flashing a buy signal to Guggenheim Partners’ Scott Minerd.

A raft of issuance and better-than-expected economic data sent yields on 30-year U.S. government bonds higher by 20 basis points this week -- the worst since June. Yet the Federal Reserve’s oft-repeated intention to keep rates low means the surge in longer-dated yields could be short-lived, according to the money manager, who remains bullish on Treasuries over the longer-term.

“The Fed has made it clear to us that they would not want to see long-term rates rise, and I would expect in the policy statements coming in September that we will see some commitment to keeping rates lower,” Minerd said in a Bloomberg Television and Radio interview Friday. “The weakness in bonds, especially from here, would be a buying opportunity.”

The selloff comes amid growing uncertainty about whether further government stimulus will be enacted, with negotiations still locked in a stalemate. Minerd -- who doesn’t think lawmakers will agree to anything until September -- says that’s another reason to bet on bonds, even with yields still hovering near historical lows.

“They don’t represent good , they give incredibly poor returns, but the pressures in the economy look like they will ultimately turn back to negative,” Minerd said.

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