China—ye of 145% levies—owns $760 billion in long-term Treasuries. Think they may be looking to sell?
China dumping bonds would obviously put pressure on long rates. This, in fact, may be the reason why long-dated yields are not lower in the face of slowing economic data.
The “short end” of the yield curve, on the other hand, is insulated from overseas sales. It follows the Fed, which is still relatively high, at least for the time being. When the Fed begins to cut again, these divvies will compress, so this may be the best time to find safety and yields between 4.3% and 5%.
These low-duration bonds are not at risk when a trade war adversary begins to sell. Here are five of the safest, most liquid short-term bond funds on the market today.
This post originally appeared at Contrarian Outlook.