UBS predicts a potential 20% yield on 10-year U.S. Treasury notes from Investing.com amid recession fears

Investing.com

Published September 29, 2023, 4:30 p.m. ET

Amid an uncertain economic climate, investors in the $25 trillion Treasury market may be able to earn high returns on U.S. Treasuries within a year. According to Solita Marcelli’s team at UBS Global Wealth Management, holders of 10-year Treasury notes could see a total return of up to 20% in the event of a U.S. recession.

This forecast is based on expectations of a significant recovery in US debt as investors seek safety amid economic turmoil. The potential for high returns is influenced by several factors, including the Federal Reserve’s stance on interest rates and influential investor Bill Ackman’s views on Treasury yield increases.

The development of several market indices is also seen as significant in this context. These include the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), the Dow Jones Industrial Average (DJIA) and the iShares Core US Aggregate Bond ETF (AGG). The potential rise in the 30-year Treasury yield (BX:TMUBMUSD30Y) is likely to impact both the S&P 500 Index (SPX) and the Nasdaq Composite Index (COMP).

The situation highlights the interconnectedness of various elements of the financial markets, with the performance of government bonds, stocks and other investment instruments influencing each other. Therefore, investors are closely monitoring these developments to make informed decisions about their investment strategies in the current economic environment.

This article was created with the assistance of AI and reviewed by an editor. More information can be found in our terms and conditions.

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Written by: Investing.com