Bonds Fall on Doubts Over Treasury's Plan | Real Yield 8/20/2026

Watch on YouTube ↗  |  August 20, 2026 at 21:00  |  44:24  |  Bloomberg Markets
Speakers
Ian Lyngen — Head of US Rates Strategy at BMO Capital Markets
Stephanie Roth — Chief Economist, Wolfe Research
Jeffrey Sherman — Deputy Chief Investment Officer at DoubleLine Capital
Milwood Hobbs — Deputy CIO, Oaktree Strategic Credit
Meghan Robson — Head of US Credit Strategy, BNP Paribas
Matt Winker — Editor-in-Chief Emeritus, Bloomberg
Jonathan Levin — Columnist, Bloomberg Opinion
Silas Brown — Senior Reporter, Bloomberg

Summary

The episode discusses the recent volatility in the US Treasury market following the Treasury's surprise announcement to increase buybacks of longer-dated debt. Guests analyze the implications of rising government deficits, persistent inflation, and the upcoming Jackson Hole symposium on bond yields and credit markets.

  • US Treasury yields bounced back after a brief drop following the Treasury's buyback announcement.
  • Experts debate whether the Treasury's intervention can sustainably lower long-term borrowing costs.
  • The private credit market is seeing better risk pricing and a balance of capital and opportunities.
  • Texas municipal bonds face wider spreads than California due to anti-ESG legislation and climate risks.
  • Investors are favoring bank debt and leveraged loans as they navigate duration risk and potential rate hikes.
Ideas
Ian Lyngen Head of US Rates Strategy at BMO Capital Markets 7:48
Long-dated Treasury yields will drift higher.
Longer-dated Treasury yields will likely drift higher because the underlying real economy appears strong enough for the market to focus on term premium and issuance concerns, unless there is a fundamental change to the deficit.
US Long-dated Treasuries MED
Stephanie Roth Chief Economist, Wolfe Research 8:28
Softer economic data will lower Treasury yields.
Treasury yields could see relief in the fall as economic data softens, shifting market focus back to economic fundamentals rather than structural supply problems.
TLT MED
Jeffrey Sherman Deputy Chief Investment Officer at DoubleLine Capital 23:23
Microsoft bonds offer better revenue visibility.
Investors will prefer lending to high-quality corporates like Microsoft over the short term rather than the US government over the long term, due to better revenue visibility compared to massive government deficits.
US 30-year Treasuries HIGH
Jeffrey Sherman Deputy Chief Investment Officer at DoubleLine Capital 23:23
Microsoft bonds offer better revenue visibility.
Investors will prefer lending to high-quality corporates like Microsoft over the short term rather than the US government over the long term, due to better revenue visibility compared to massive government deficits.
MSFT HIGH
Milwood Hobbs Deputy CIO, Oaktree Strategic Credit 30:12
Private credit risk is being better priced.
The private credit market is attractive right now as risk is being better priced due to a better balance of capital and opportunities, allowing for judicious deployment of capital.
BIZD MED
Meghan Robson Head of US Credit Strategy, BNP Paribas 32:13
Avoid high-yield restaurants as consumers struggle.
Avoid high-yield consumer sectors exposed to lower-income cohorts, such as restaurants, because lower-income consumers are struggling with higher interest rates constraining cash flows.
High-yield restaurant bonds HIGH
Meghan Robson Head of US Credit Strategy, BNP Paribas 34:29
Prefer bank debt in the curve's belly.
Bank debt is preferred over corporate debt, specifically positioning in the belly of the yield curve to hide out and avoid longer duration risks.
Corporate debt HIGH
Meghan Robson Head of US Credit Strategy, BNP Paribas 34:29
Prefer bank debt in the curve's belly.
Bank debt is preferred over corporate debt, specifically positioning in the belly of the yield curve to hide out and avoid longer duration risks.
KBE US Treasury belly of the curve HIGH
Meghan Robson Head of US Credit Strategy, BNP Paribas 34:41
Rate hikes will benefit leveraged loan carry.
Leveraged loans look attractive because expected rate hikes starting in December will benefit the carry of floating-rate loans versus fixed-rate debt.
Leveraged Loans HIGH
Matt Winker Editor-in-Chief Emeritus, Bloomberg 37:03
Anti-ESG policies make Texas munis hazardous.
Texas municipal bonds face higher borrowing costs and wider spreads compared to California because Texas's anti-ESG policies and climate risks make them more hazardous for investors.
Texas municipal bonds HIGH
Matt Winker Editor-in-Chief Emeritus, Bloomberg 37:03
Anti-ESG policies make Texas munis hazardous.
Texas municipal bonds face higher borrowing costs and wider spreads compared to California because Texas's anti-ESG policies and climate risks make them more hazardous for investors.
California Municipal Bonds HIGH
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This Bloomberg Markets video, published August 20, 2026, features Ian Lyngen, Stephanie Roth, Jeffrey Sherman, Milwood Hobbs, Meghan Robson, Matt Winker discussing US Long-dated Treasuries, TLT, US 30-year Treasuries, MSFT, BIZD, High-yield restaurant bonds, Corporate debt, KBE, US Treasury belly of the curve, Leveraged Loans, Texas municipal bonds, California Municipal Bonds. 11 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Ian Lyngen, Stephanie Roth, Jeffrey Sherman, Milwood Hobbs, Meghan Robson, Matt Winker  · Tickers: US Long-dated Treasuries, TLT, US 30-year Treasuries, MSFT, BIZD, High-yield restaurant bonds, Corporate debt, KBE, US Treasury belly of the curve, Leveraged Loans, Texas municipal bonds, California Municipal Bonds