‘We do have a cash buffer,’ T. Rowe Price’s CIO and head of global multi-asset told MarketWatch on the sidelines of Charles Schwab’s Impact 2023 conference in Philadelphia.
Ten-year Treasury yields may keep climbing over the next two to three months, after startling markets with their recent surge, according to Sebastien Page, chief investment officer and head of global multi-asset at T. Rowe Price.
The bond market has been rocked this year by a surge in 10-year yields that also has hurt equity valuations. The iShares Core U.S. Aggregate Bond ETF AGG, which tracks an index of U.S. investment-grade bonds, has lost 2.2% this year on a total return basis through Tuesday, while the price of the S&P 500 index SPX remains up 10.6% over the same period, according to FactSet data.
In his view, the Fed probably won’t cut interest rates next year and the U.S. may experience a so-called soft landing where the economy slows without causing a recession.He said he is not yet willing to go overweight equities due to concern over the lag effect of the Fed’s interest rates hikes, with higher borrowing costs likely to bite consumers and businesses.
Cash-like Treasury bills, which have ultra-short-term maturities, have yields of more than 5%. For example, the yield on the one-month Treasury bill BX:TMUBMUSD01M was trading at 5.4% on Wednesday morning, according to FactSet data, at last check.
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