With the rise in US treasury yields, the prices of long-term US treasury bond ETFs have been falling continuously, leading to expanding losses for investors. Many bond investors have recently posted “graduation messages” on social media, mocking that “easy questions have become impossible questions” and choosing to stop losses and exit the market.
The release of non-farm payroll data on Friday far exceeded market expectations, leading to a significant increase in US bond yields. The 10-year US treasury yield rose by 11.6 basis points to 4.797%, the 2-year US treasury yield jumped by 13.4 basis points to 4.396%, and the 30-year US treasury yield even surpassed 5%, reaching 5.0003%, the first time since November 2023.
As US treasury yields climb, the prices of long-term US treasury bond ETFs continue to decline, resulting in ongoing losses for investors. Many bond investors have recently posted so-called “graduation messages” on social media, mocking that “easy questions have become impossible questions” and choosing to stop losses and exit the market.
One PTT netizen with the nickname “Little Vegetable” shared his experience. He had used the collateral funds from Pledged Securities Loan (PSL) 0050 to purchase long-term US treasury bonds, but due to the increase in collateral interest rates by the brokerage, he ultimately decided to sell the US bonds and redeem the collateral, officially declaring his “graduation from bond investing”. This operation resulted in a loss of 98,000 NT dollars. He lamented, “I once had very good paper profits. Thanks to US treasury bonds for teaching me a lesson. I bow down and step aside,” and even self-mockingly said, “I am just a naive investor.” Finally, he jokingly added, “I’m thinking of using the money to buy more Ether, but I don’t know if I should take a cold shower first..”
Experts call a 5% yield a good buying opportunity. However, many experts believe that if the 10-year US treasury yield really surges to 5%, it will be a good buying opportunity. Citigroup’s Chief Investment Strategist, Steven Wieting, stated that a yield breakthrough of 5% will 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, where the Federal Reserve took a hawkish stance and bond supply increased, is similar to the current environment. If the Federal Reserve continues to cut interest rates and inflation is contained, these factors may limit further increases in yields, making the 5% level a good investment opportunity.
The manager of China Trust ESG Financial Income Multi-Asset Fund, Luo Shi-ming, stated that through trend analysis, the long-term downward trend in interest rates 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 appropriate time and extend their investment horizon to lock in returns.
Criticism from PTT netizens. However, after the news was reposted on PTT, it sparked discussions, and netizens left comments mocking: “Will the next article be ‘Is a 6% US bond yield a good buying opportunity?'”, “Easy questions have turned into impossible questions, and a big gift package has turned into a big brain package?”, “It seems that the low point has not yet been reached,” “Fear will arise when the US bond yield reaches 7%.”
However, some people believe that a 5% yield may seem attractive, but caution is still required in the current situation: “Under normal circumstances, a 5% yield is a big gift package, but now Trump is in power.”
However, some netizens have expressed different opinions, believing that a 5% yield is suitable for retirees to generate income or pointing out, “As long as the US does not default on its debt, just keep buying. What is there to be afraid of?”
Is it a good time to buy? When considering whether to enter the US bond market, investors should comprehensively assess the US economic trend, Trump’s actions regarding tariff wars, Federal Reserve policies, and their own risk tolerance. It is recommended to enter the market in batches to diversify potential risks. If there is concern about further increases in yields, short-term bonds can be chosen to reduce the impact of interest rate volatility. In addition, investors should clearly define their goals, whether they hope to obtain stable interest income or expect future price increases, and select the appropriate bond types based on their goals.