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Bond selloff seen overdone; government bonds may be safer amid inflation and recession risks.

Market News
10 Oct 2026
Seeking Alpha
View Source
Neutral
Bond selloff seen overdone; government bonds may be safer amid inflation and recession risks.

The recent selloff in the bond market, especially in short-term bonds, is considered excessive given limited term premium and expectations of three 25 basis point rate hikes by 2027. Despite higher nominal growth, persistent inflation, and the Fed's hawkish stance pushing real yields near 3%, long-term yields remain close to historical averages. Corporate bonds may face losses if AI-driven or economic slowdowns occur, with credit spreads still low. For cautious investors, holding government bonds with yields above 5% to maturity could be a safer strategy amid recession concerns over the next five years.

The iShares 20 Plus Year Treasury Bond ETF (TLT) holds a market cap of $48.44 billion and sees a daily trading volume of 26,415,928 shares on Pluang as of Oct 10, 2026, 23:51 WIB. Despite the article's focus on bond market selloffs and yield comparisons, TLT's price edged up slightly by 0.14% on the day. Pluang investors typically hold this ETF for about 83 days, with recent order activity showing a slight tilt towards selling at 56%.

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