Minerd Sees ‘Buying Opportunity’ in Treasuries After Selloff

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.

Minerd Sees ‘Buying Opportunity’ in Treasuries After Selloff

“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.”

Minerd Sees ‘Buying Opportunity’ in Treasuries After Selloff

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 value, they give incredibly poor returns, but the pressures in the economy look like they will ultimately turn back to negative,” Minerd said.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.