RBC Sees Value in Long Treasuries

Thirty-year real Treasury yields have climbed high enough to force a fresh reckoning across the bond market.

That is the message emerging from RBC Wealth Management, where Rufaro Chiriseri, the firm’s head of fixed income for the UK and Europe, says long-dated US government debt has started to look more compelling even as investors remain cautious. Speaking to Bloomberg Television, Chiriseri made clear that RBC still prefers to sit closer to the short end of the market. But he also pointed to a major shift in valuation: 30-year real yields now stand at levels investors have not seen since the global financial crisis.

That matters because real yields cut through part of the inflation fog that has clouded markets for years. Nominal yields tell investors what a bond pays on paper. Real yields show what they may actually earn after inflation. When those inflation-adjusted returns move sharply higher, long-term government debt can start to offer something rare in a volatile era: the prospect of meaningful income without a leap into riskier assets.

The timing of RBC’s view captures a market at a tense crossroads. Treasury yields have climbed as investors reassess the path of growth, inflation, and central bank policy. Higher long-term yields usually signal a more demanding environment for borrowers, more pressure on valuations, and tougher choices for portfolio managers. They also create opportunity. What looked unattractive when rates sat near historic lows can begin to look reasonable when investors finally get paid to lock money up for decades.

Chiriseri’s comments also reflect a split mindset that now defines much of fixed income investing. On one side sits caution. The short end offers less sensitivity to big swings in rates and gives investors more flexibility if the outlook changes quickly. On the other side sits valuation. When long-dated real yields rise far enough, they begin to compensate investors for taking duration risk. RBC is not signaling an all-in turn toward the long end. It is signaling that the math has become harder to dismiss.

Why higher real yields change the bond debate

For much of the post-crisis period, investors searching for returns often had to stretch into equities, corporate credit, or more complex corners of the market. Government bonds, especially long-dated ones, often looked expensive or exposed if inflation revived. That backdrop has changed. Reports indicate that the rise in real yields has reset expectations across portfolios, giving institutions and wealth managers a chance to reconsider the role of long Treasuries as both an income source and a potential hedge if economic conditions weaken.

“It starts to look a lot more interesting with 30-year real yields at levels that we haven’t seen since the GFC.”

The reference to the global financial crisis carries weight because it anchors today’s move in a period when markets last confronted deep dislocation and radically different pricing. The comparison does not imply the same crisis conditions now. It does underline how unusual current yield levels look after more than a decade shaped by near-zero rates, quantitative easing, and repeated investor demand for safe assets. In practical terms, higher real yields mean investors can once again earn more from patience.

That shift reaches beyond bond desks. Higher Treasury yields influence mortgage costs, corporate borrowing, government financing, and the discount rates that shape asset prices across markets. When the 30-year part of the curve moves to levels that attract major wealth managers, the message travels quickly. It tells investors that the market no longer revolves only around where the Federal Reserve moves next. It also revolves around how much compensation long-term capital now demands.

What investors watch next

The next question is whether these yield levels hold long enough to trigger broader reallocations. If inflation cools and growth slows, long-dated bonds could gain support from investors seeking safety and locked-in returns. If inflation stays sticky or concerns about fiscal pressures intensify, yields could remain elevated or climb further, testing demand even at more attractive levels. RBC’s stance suggests many investors may keep favoring shorter maturities while selectively warming to the long end rather than making a full pivot.

Over the longer run, this moment may mark an important reset in how investors think about government debt. For years, long Treasuries often served as expensive insurance or a weak source of income. Now they may start to reclaim a more traditional role in diversified portfolios. That does not erase the risks tied to duration, inflation, or policy surprises. It does mean the market has crossed a threshold where long-term US bonds are no longer easy to dismiss — and where the price of safety has started to look more like an opportunity.