Regan Capital's Skyler Weinand calls for aggressive Fed action to lower long-term yields, recommending investors stick to two-to-three-year maturities to capture 5-6% yields without excessive duration risk.
Elevated 10-year Treasury yield near 5% reflects inflation, borrowing, and supply concerns, and the CIO sees long-duration exposure as inadequately compensated.
20-year Treasury trading near 5.45% highlights long-end rate risk, with the advisor cautioning against extending duration.
The CIO recommends the two-to-three-year maturity range as the sweet spot, where agency and AAA securities offer 5-6% yields with limited rate risk.
Regan Capital CIO Skyler Weinand argues the Federal Reserve must implement a 50-basis-point rate hike to stabilize long-term yields and combat inflation. With 10-year Treasury yields near 5%, Weinand warns that political influence on the Fed creates uncertainty, advising investors to favor short-duration assets in the two-to-three-year range to capture 5-6% yields while avoiding long-end volatility.
The curve remains historically flat, meaning investors are not adequately compensated for the additional interest-rate risk associated with longer-dated maturities.
Weinand cites a supply-heavy environment driven by record U.S. government borrowing, AI infrastructure capital needs, and foreign debt issuance as key pressures on long-term yields.