UBS says Treasurys are poised for a powerful rebound as outlook for U.S. stocks dims

Treasury bonds are coming off of one of their worst routs of all time. But amid the carnage, one major European investment bank sees opportunity.

The 10-year Treasurys could book a total return of 19% by June if the U.S. economy enters a recession during the coming months, Haefele said. “Our new price targets are 4,500 for June 2024 and 4,700 for December 2024. The delay from June to December in our 4,700 target is primarily related to the recent rapid move higher in interest rates and our fixed income colleagues’ expectations that interest rates will remain higher for longer,” Lefkowitz said.

But plenty have lined up to buy at these levels as well. Despite heavy losses. Investors, including both retail and institutional players, poured more than $920 million into the iShares 20+ Year Treasury Bond ETF TLT, one of the most popular Treasury bond ETFs, in September, the heaviest monthly inflow all year, according to the latest data available from FactSet.

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