A BlackRock think tank said on Monday that it is cautious about long-term US Treasuries before the November US presidential election due to the huge fiscal deficit, as investors may require more compensation to hold US Treasuries. "We continue to increase our holdings of US stocks before the US election, but we are cautious about long-term US Treasuries," the firm said in a report. BlackRock said that neither Biden nor Trump "has planned a path to sustained deficit reduction." The huge deficit will keep inflation high, so interest rates may remain high for a long time. The firm said: "We believe that this, as well as the market's need to absorb a large amount of bond issuance, will prompt investors to demand more term premiums, or more compensation to hold long-term US Treasuries." The firm maintains its recommendation to "increase" short-term US Treasuries, preferring short-term bonds in a high-interest rate environment and maintaining a neutral attitude towards long-term US Treasuries.
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A BlackRock think tank said on Monday that it is cautious about long-term US Treasuries before the November US presidential election due to the huge fiscal deficit, as investors may require more compensation to hold US Treasuries. "We continue to increase our holdings of US stocks before the US election, but we are cautious about long-term US Treasuries," the firm said in a report. BlackRock said that neither Biden nor Trump "has planned a path to sustained deficit reduction." The huge deficit will keep inflation high, so interest rates may remain high for a long time. The firm said: "We believe that this, as well as the market's need to absorb a large amount of bond issuance, will prompt investors to demand more term premiums, or more compensation to hold long-term US Treasuries." The firm maintains its recommendation to "increase" short-term US Treasuries, preferring short-term bonds in a high-interest rate environment and maintaining a neutral attitude towards long-term US Treasuries.