Treasurys May be Effective Hedge if AI-Driven Selloff Deepens
Dow Jones17:33
U.S. Treasurys could regain their diversification value if an AI-led market correction deepens, say Julius Baer analysts in a note. While stock-bond correlations have risen, the bank says a sharper AI downturn would resemble a traditional negative demand shock, as weaker data-center investment, falling equity wealth and softer hiring weigh on consumption and business spending.
Historically, U.S. 10-year Treasurys delivered positive returns during equity drawdowns between 2000 and 2020, the bank notes. Julius Baer says recent correlation doesn't necessarily undermine Treasurys' hedging potential, and sees intermediate-duration U.S. government bonds as an effective portfolio hedge.
At the request of the copyright holder, you need to log in to view this content
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments