Thoughtful Money with Adam Taggart Bonds Trading At A Bargain Right Now? | Jim Masturzo
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Aug 19, 2025 Jim Masturzo, CIO of Multi-Asset Strategies at Research Affiliates, champions a contrarian bullish outlook on bonds, forecasting a unique opportunity for growth in the next 3 to 5 years. He discusses why the market is overly bearish, how tariffs and inflation impact economic dynamics, and predicts U.S. Treasuries will remain a safe haven despite reduced foreign purchases. Additionally, Masturzo highlights emerging market equities, advocating for ETFs as a safer investment strategy while navigating economic uncertainties and risks in private credit.
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Bonds Biased Toward Lower Yields
- Research Affiliates sees bond yields skewed lower over the next 3–5 years due to policy options and fragility in the economy.
- That makes owning intermediate-duration treasuries attractive for coupons and potential capital gains.
Shift Some Cash Into Intermediate Treasuries
- Consider moving from very short T-bills into the belly of the curve (about 5–7 years) to capture higher coupons and duration if yields fall.
- Locking intermediate-duration treasuries reduces rollover risk while staying in liquid, deep markets.
Tariffs Create Drip Inflation
- Tariffs act partly as an incremental inflationary drag because firms will pass costs through over time rather than all at once.
- That creates a drawn-out feeling of rising inflation even if the total price change equals a one-time shock.