19 March 2025 | Dollar

US bond investors are extending duration due to risks of economic slowdown

US bond investors are extending duration due to risks of economic slowdown

Investors are buying long-term US bonds on worries about a possible economic downturn in the country. At the same time, they reduce risk positions, Reuters reports.

Portfolio managers buy longer-dated assets anticipating a further drop in yields, the agency's experts believe. In doing so, market participants demonstrate their expectation of a deeper rate-cutting cycle. According to Christian Hoffmann of Thornburg Investment Management, investors' actions are motivated not so much by the current economic outlook as by concerns about the future.

J.P. Morgan analysts point out the largest net-long position on US Treasuries since 2010. This, coupled with excessive purchases, may lead to a temporary increase in bond value.

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