As US bond yields rise, the prices of long-term US Treasury bond ETFs continue to fall, resulting in expanding losses for investors. Many bond investors have recently posted “graduation posts” on social media platforms, jokingly referring to the situation as “sending a death sentence instead of an easy question” and choosing to cut their losses and exit the market.
Friday’s release of non-farm payroll data far exceeded market expectations, leading to a sharp increase in US Treasury bond yields. The 10-year US Treasury bond yield rose by 11.6 basis points to 4.797%, the 2-year US Treasury bond yield jumped by 13.4 basis points to 4.396%, and the 30-year US Treasury bond yield even surpassed 5%, reaching 5.0003%, its highest level since November 2023.
As US Treasury bond yields rise, the prices of long-term US Treasury bond ETFs continue to fall, resulting in expanding losses for investors. Many bond investors have recently posted so-called “graduation posts” on social media platforms, jokingly referring to the situation as “sending a death sentence instead of an easy question” and choosing to cut their losses and exit the market.
One netizen, nicknamed “Little Vegetable,” shared his experience on the PTT forum. He had used his collateral for the 0050 ETF to purchase long-term US Treasury bonds. However, due to the brokerage firm raising the collateral interest rate, he ultimately decided to sell the bonds and redeem his collateral, officially declaring himself “graduated from being a bond frog.” This operation resulted in a loss of 98,000 NT dollars. He lamented, “I once had very good unrealized profits. Thanks to the US Treasury bonds, I learned a lesson and now I bow out,” even self-mockingly referring to himself as a “leek.” Finally, he jokingly said, “I’m thinking of taking the money and investing in Ethereum. Should I pour cold water on myself?”
Experts say a 5% yield is a good buying opportunity
However, many experts believe that if the 10-year US Treasury bond yield really rises to 5%, it would be a good buying opportunity. Citigroup’s Chief Investment Strategist, Steven Wieting, said that a yield breakthrough of 5% would be a “very attractive buying opportunity.”
Robert Tipp, Chief Investment Strategist at PGIM Fixed Income, also believes that when the yield approaches 5%, it is worth considering entering the market. She further pointed out that the situation in 2023 when the Federal Reserve took a hawkish stance and there was an increase in bond supply is similar to the current environment. If the Federal Reserve continues to cut interest rates and inflation eases in the future, these factors may limit further increases in yields, making the 5% level a good investment opportunity.
ESG financial income multiple-asset fund manager Luo Shi-Ming from China Trust also stated that, based on trend observations, the long-term trend of interest rate cuts remains unchanged, and the rise in yields provides a good opportunity for investors who have not entered the bond market. Investors can enter the market at the right time and extend their investment horizon to lock in income.
Mocked by PTT netizens
However, after the news was reposted on the PTT forum, it sparked heated discussions and netizens made sarcastic comments such as “Will the next article be ‘Is 6% yield a good buying opportunity for US bonds?'” and “Has the easy question turned into a death sentence? Has the big gift package turned into a headache package?” and “It seems like the low point has not been reached yet,” and “The panic about a 7% yield for US bonds will soon appear.”
However, some people believe that although a 5% yield seems attractive, caution is still needed under the current circumstances: “Under normal circumstances, 5% is a big gift package, but now Trump is in power.”
However, some netizens expressed different opinions, stating that a 5% yield is suitable for retirees who want to receive dividends, or pointing out, “As long as the US does not default on its debt, just keep buying. What’s there to be afraid of?”
Is it a good buying opportunity?
When considering whether to enter the US bond market, investors should comprehensively evaluate the trend of the US economy, Trump’s actions in starting a trade war, Federal Reserve policies, and their own risk tolerance.
It is recommended to enter the market in stages to diversify potential risks. If there are concerns about further increases in yields in the future, investors can also choose short-term bonds to reduce the impact of interest rate volatility. In addition, investors should clarify their goals, whether they want to obtain stable interest income or expect future price increases, and choose the appropriate type of bonds based on their goals.