The U.S. bond market is experiencing significant turbulence as 10-year Treasury yields hit their highest level since 2023, amid a federal deficit of approximately $2 trillion and total government debt exceeding $40 trillion. The Federal Reserve has signaled a potential rate hike, reigniting inflation concerns among bondholders. Financial advisors are recommending defensive strategies including shortening duration, focusing on high-quality bonds, and turning to safe-haven assets such as gold. Investment-grade corporate debt offers opportunities in the 5% to 6% range, while ultra-short bond ETFs recorded $12.8 billion in inflows in July.
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