IE IEI iShares 3-7 Year Treasury Bond ETF Loading... : Bullish and Bearish Analyst Opinions

Barbell fixed income: favor intermediate-term bonds.

Temporary peace hedge to offset duration risk in short credit trade; not a conviction trade but fills a gap until SONIA options are accessible.

Busch advises investors to "step out the curve and lock in yields" specifically in the "2 to 5 year part of the curve." He believes the Fed (under potential chair Kevin Warsh) might cut the overnight rate, but the long end (10yr+) will stay high due to debt supply. The "belly" of the curve (3-7 year duration) offers the best risk/reward. You capture the price appreciation if the Fed cuts rates (front-end drops), but you avoid the duration risk of the long bond (30yr) which might sell off due to fiscal deficits. Long 3-7 Year US Treasuries (IEI tracks this duration). If inflation re-accelerates to 4-5%, the Fed may be forced to hike, crushing all duration assets.

Oakley states his firm keeps about 50% of assets in short-term Treasuries and recently moved duration out to three years to "lock" rates. He anticipates a mid-year market decline typical of the second year of a presidential term. Moving to 3-year duration secures yield before potential rate cuts while avoiding the inflation risk inherent in 10-30 year bonds. LONG short-to-intermediate duration Treasuries as a cash proxy and volatility buffer. Inflation spikes significantly above the locked yield; missed upside if equities rally continuously.