U.S. Treasury Yields Hit 2002 High as Bond Bears Turn Bullish

U.S. Treasury yields have reached their highest closing levels since 2002, prompting two longtime government-bond bears to turn more positive on long-term debt as markets reassess rates and liquidity conditions.

The 10-year Treasury yield closed near 5.31% Monday, while the 30-year yield reached 5.66%. Both marked their highest closing levels in 24 years.

Anatole Kaletsky, co-founder of Gavekal Research, began favoring 10-year and 30-year Treasurys this week after advising investors since 2022 to avoid government bonds in major developed economies. He now expects U.S. interest rates may decline again.

Jim Bianco, founder of Bianco Research, shifted toward long-term Treasurys last week for the first time in six years. He considers current yields attractive after the prolonged sell-off and sees long-term bonds as a potential hedge if economic conditions weaken sharply or stocks undergo a major correction.

The roughly $47 billion TLT fund fell for 10 consecutive trading sessions but still recorded about $5.3 billion in net inflows this year. Fiscal deficits, Treasury issuance, artificial-intelligence companies’ financing needs, war spending and higher energy prices remain factors that could keep long-term yields elevated.