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Desjardins Sees Longer-Duration U.S. Treasuries to Likely Underperform Government of Canada Bonds This Year

BY MT Newswires | TREASURY | 12:17 PM EST

12:17 PM EST, 02/05/2026 (MT Newswires) -- The buyer base of United States Treasuries is shifting towards investors who are more price sensitive, said Desjardins.

Official accounts, which include central banks, some sovereign wealth funds and some international pensions, have been reducing their ownership share of USTs, stated Desjardins.

That should make U.S. rates more volatile and could put upward pressure on long-end yields, wrote the bank in a note to clients.

While Federal Reserve officials have been leaning more hawkish this year, policymakers are likely to ease policy further before the end of the year. That should provide a tailwind to shorter-dated USTs, according to Desjardins.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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