US government bonds yield cross 5%, a decadal high: Should you invest?
Investing in US government bonds will give you the opportunity to benefit from current high yields, potential capital gains in the future when interest rates move down, potential gains from INR depreciation, etc.
On 23rd October 2023, the US 10-year government bonds yield crossed the 5% mark during the trading session. It was the highest level seen since 2007. Traditionally, the interest rate spread between 10-year Indian government bonds and US government bonds has been in the 400 to 600 basis points. However, recently, the spread reached a decadal low of around 250 basis points. So, does that make US government bonds attractive, and should you invest? Let us explore.