The Strategist

BofA expects recovery in total return on 30-year USTs in the second half of 2024

05/20/2024 - 03:07

Bank of America analysts led by Michael Hartnett believe that the aggregate yield on investments in 30-year U.S. government bonds has decreased by 45% since April 2020, which is the largest four-year reduction in over a century, writes MarketWatch.
They argue that such a severe fall was caused by high inflation and increased government spending.

Due to increased inflation, the real GDP growth rate in the United States is currently approximately 6%, whereas the real economy grew by roughly 4% between the 1990s and the 2010s. Analysts claim that as a result, investors are now beginning to invest in assets other than bonds.

In the second half of the year, though, the situation may change with the anticipated relaxation of monetary and fiscal policies, experts believe.