Bank of America strategist Michael Hartnett is warning bond investors to avoid long-duration Treasuries as the U.S. national debt approaches $40 trillion. The debt stands at roughly $39.9 trillion and is expected to cross the $40 trillion threshold as early as this week, with Hartnett projecting it will reach $50 trillion by 2029. He argues that heavy government borrowing forces the Treasury to issue more bonds, pushing yields higher and making existing long-term bonds lose value. The 10-year Treasury yield has reached 4.6% and the 30-year yield 5.2%, while the government's annual interest bill has climbed to about $1.4 trillion. Hartnett's 'Anything but Bonds' framework favors assets such as gold, equities, biotech, and real estate until five-year Treasury yields fall below roughly 3.25%.
Bank of America CorpBank of America strategist warns on bonds, potentially affecting investor sentiment toward the firm's bond-related business.
