Citi Wealth says 5% Treasuries would be appealing

Citi Wealth says 5% Treasuries would be appealing
Economist sees rising yields but base case is below 5%.
JAN 08, 2025
By  Bloomberg

by Ruth Carson and Betty Hou

US Treasury 10-year yields can rise further to 5% as the economy hums along, a level that would offer a buying opportunity, according to Citigroup Inc.’s wealth division.

“Close to five is certainly possible” this year, Steven Wieting, chief investment strategist and chief economist, said on 10-year US yields. “Five would be something that we would think would be really appealing,” he said in a briefing in Singapore. 

Benchmark US yields have soared to near 4.70% on Tuesday from a September low of 3.60% as investors brace for inflationary policies under Donald Trump’s second US presidency. The economy’s resilience has spurred traders to push back expectations on the Federal Reserve’s next quarter-point interest rate cut to July, prompting a rethink on just how high yields can go.

Options markets are also flashing the potential for a spike in 10-year yields to 5% — a level not seen since October 2023. Closely-watched non-farm payrolls data due Friday may give Treasury traders another reason to sell should the data beat estimates. 

Citi’s Wieting doesn’t have 5% yields as a base case. The firm sees benchmark yields ending the year around 4.75%, and the Fed funds rate at 3.75%.  

Others like BlackRock Inc.’s Navin Saigal also see higher US bond yields as attractive. 

“The yield back up is of course a little painful,” Saigal, head of fundamental fixed income, Asia Pacific, said on Bloomberg Television. “But in some ways it could also be viewed as a gift — there’s still a lot of cash sitting on the sidelines and now this cash can now be put to work.”

 

Copyright Bloomberg News

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.