Karishma Vanjani
Ned Davis Research's Joe Kalish is interested in pivoting to Treasuries, even as the debt market wraps up a tumultuous week.
The firm's chief macro strategist is looking past this week's noise and toward a bigger picture that he says will still trigger demand for U.S. government bonds.
Rates markets have been in limbo: A newfound recognition that oil prices can threaten to hurt the economy triggered a round of buying in haven Treasuries earlier this week -- but fresh signs of a stronger-than-expected labor market flipped those bets on Friday. The result was a 10-year yield that rose two of the past five trading days, including Friday, when it rose 0.032 percentage point to end at 4.344%.
Bond yields and prices move inversely, so higher yields mean the value of the underlying bonds has fallen.
"I am still interested in buying bonds at the right price," he wrote in a note on Thursday. Currently, he is holding fewer bonds than the average benchmark, but indicated a willingness to buy when the 10-year yield rises above 4.5%. The 10-year yield reached as high as 4.386% on Friday.
For his bet to play out, other investors would also need to purchase Treasuries at a similar yield level, in the hopes that would be the peak for 2026. Kalish's model says the right value for 10-year yields is at 3.74%.
What's his rationale? When the smoke clears and the dust settles from the Iran war, plenty of uncertainty will remain to push people into the haven asset.
"We will still be left with AI disruption and questionable valuations, problems in private credit, and worries about Fed [Federal Reserve] independence," he wrote.
The idea is the bond market will see buying from stock investors who move out of overpriced equities, while money that was supposed to go to private credit also will be redirected into bonds. Bonds are "the only market large enough to handle any asset reallocation," he wrote.
Kalish's bullish take on the Treasury market is similar to that of Morgan Stanley. The firm told investors to buy Treasuries -- specifically U.S. debt expiring in five years -- in a March 27 note titled.
Torsten Sløk, Apollo Global's chief economist, also predicts the 10-year yield should move lower. He wrote last week that the note's yield should be at 3.9%.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com
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(END) Dow Jones Newswires
April 03, 2026 14:09 ET (18:09 GMT)
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