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PGIM says repricing of 30-year U.S. Treasury yields has begun

2026-07-09·newswire-us-stock-162314

PGIM says repricing of 30-year U.S. Treasury yields has begun.

Gregory Peters of PGIM said that the return of the 30-year U.S. Treasury bond yield above 5% is prompting investors to rethink what levels are considered attractive. Peters expects U.S. Treasury and 30-year corporate bond yields to move significantly higher and believes that 5.5% is a "pretty good" level for long-term Treasuries.

The co-chief investment officer of PGIM Credit said in an interview that given the increase in bond issuance related to artificial intelligence and hyperscale cloud service providers, as well as the increase in the scale of bond issuance by the U.S.

Treasury Department, "this is just the beginning, not the end" and "you will see pressure on long-term yields." Peters believes this is just the early stages of the market re-examining and re-pricing what is considered attractive in terms of long-term yields.

Peters said the steepening trend in the yield curve will gain further momentum in the coming quarters and years, with rising debt pushing up long-term yields. Peters is a member of the U.S. Treasury Department's Borrowing Advisory Committee. The committee meets quarterly in Washington to discuss the outlook for U.S. fiscal financing needs.

Peters is most bullish on bonds in the middle and short end of the U.S. Treasury yield curve. As yields rise, investors will benefit as the maturities of these bonds shorten and become shorter-maturity bonds.

"You don't need to take the duration risk, and being at the middle and front end of the yield curve is a completely different situation than being at the long end," he said. Before the Fed's June meeting, PGIM had shifted from expecting an interest rate cut to expecting three rate hikes of 25 basis points each time this year.

At the June meeting, Chairman Kevin Warsh surprised the market by emphasizing his hawkish stance on price stability. Currently, traders predict through the OIS futures contract that the Federal Reserve will raise interest rates by about 0.35 percentage points this year, with the first 25 basis point increase expected in October.

Peters said: "We are very close to raising interest rates. As for whether it will start in July, it can be discussed."

#Stocks #AI #Fed #Bonds

Full text

PGIM says repricing of 30-year U.S. Treasury yields has begun

Gregory Peters of PGIM said that the return of the 30-year U.S. Treasury bond yield above 5% is prompting investors to rethink what levels are considered attractive. Peters expects U.S. Treasury and 30-year corporate bond yields to move significantly higher and believes that 5.5% is a "pretty good" level for long-term Treasuries. The co-chief investment officer of PGIM Credit said in an interview that given the increase in bond issuance related to artificial intelligence and hyperscale cloud service providers, as well as the increase in the scale of bond issuance by the U.S. Treasury Department, "this is just the beginning, not the end" and "you will see pressure on long-term yields." Peters believes this is just the early stages of the market re-examining and re-pricing what is considered attractive in terms of long-term yields. Peters said the steepening trend in the yield curve will gain further momentum in the coming quarters and years, with rising debt pushing up long-term yields. Peters is a member of the U.S. Treasury Department's Borrowing Advisory Committee. The committee meets quarterly in Washington to discuss the outlook for U.S. fiscal financing needs. Peters is most bullish on bonds in the middle and short end of the U.S. Treasury yield curve. As yields rise, investors will benefit as the maturities of these bonds shorten and become shorter-maturity bonds. "You don't need to take the duration risk, and being at the middle and front end of the yield curve is a completely different situation than being at the long end," he said. Before the Fed's June meeting, PGIM had shifted from expecting an interest rate cut to expecting three rate hikes of 25 basis points each time this year. At the June meeting, Chairman Kevin Warsh surprised the market by emphasizing his hawkish stance on price stability. Currently, traders predict through the OIS futures contract that the Federal Reserve will raise interest rates by about 0.35 percentage points this year, with the first 25 basis point increase expected in October. Peters said: "We are very close to raising interest rates. As for whether it will start in July, it can be discussed."

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