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Fund managers require the 10-year Treasury yield to reach 5.9% before they will shift capital from stocks to bonds, according to a survey by Bank of America.
The current 10-year yield stood at 5.22% on Tuesday, indicating a significant gap remains before investors view government debt as the preferred asset class.
The recent increase in bond yields is driven by high economic growth and an artificial intelligence boom, which has pushed real yields higher.
Bonds have experienced a sharp decline since March 2022, when the Federal Reserve began raising interest rates. Because bond prices move inversely to yields, this period has been difficult for fixed-income holders.
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