U.S. Bond ETF Flows Jump 60% as Investors Chase Yield Through Fed Uncertainty
Updated
Updated · CNBC · Jun 25
U.S. Bond ETF Flows Jump 60% as Investors Chase Yield Through Fed Uncertainty
1 articles · Updated · CNBC · Jun 25
Summary
U.S. bond ETF inflows are running 60% above last year, with investors pouring money into Treasuries and multi-sector income funds despite recent stock-market volatility.
Real yields and higher income are driving the shift, BlackRock and Allspring said, as investors seek better income per unit of duration and weigh bonds more favorably against stocks.
Kevin Warsh's first Fed meeting sharpened that appeal by signaling less forward guidance and keeping an inflation-fighting stance, leaving the front end of the curve steep as markets price multiple rate hikes.
Breakeven inflation rates have fallen sharply across the Treasury curve, supporting interest in short-dated TIPS even as core inflation hit its highest level since October 2023.
The backdrop remains mixed: oil has retreated to pre-war levels, but gas prices may stay high, while about 90% of recent job growth has been concentrated in healthcare, government and leisure.