Barclays Analyst Advises Investors to Stay Short on U.S. 10-Year Treasury Amid Sticky Inflation
Barclays analyst Anshul Pradhan has warned investors to remain short on the U.S. 10-year Treasury as inflation continues to stay higher than expected. Pradhan noted that inflation is following a different trajectory than what the Federal Reserve had anticipated based on recent data.
“In a higher-for-longer environment, he said investors should continue being short on the U.S. 10-year Treasury, as the firm has advised over the last several weeks,” Pradhan wrote to clients.
Despite a recent sell-off, Pradhan believes that financial conditions remain easy and that tighter financial conditions will be necessary to combat rising inflation. This, in turn, could lead to even higher long-term rates.
The warning from Barclays comes as import prices rose more than expected in March, further fueling concerns about inflation. The Labor Department reported that import prices saw their largest three-month gain in about two years, with fuel prices jumping 4.7% in March.
Meanwhile, U.S. stocks opened lower on Friday, with the Dow Jones Industrial Average falling 258 points, or 0.7%. The S&P 500 and Nasdaq Composite also shed 0.7% and 0.9%, respectively.
In another development, crude oil futures rallied as reports emerged that Israel is preparing for a direct attack by Iran, potentially escalating tensions in the Middle East. This news pushed U.S. crude oil prices above $87 a barrel.
Overall, the financial markets are facing increased volatility and uncertainty as inflation concerns persist. Investors are advised to stay vigilant and consider the implications of these developments on their investment strategies.
