Mark Woodruff, CEO of Citigroup Australia, said the appeal of US bonds as a portfolio hedge is weakening as supply increases, continued inflation, and neutral interest rates rise. He said that the 5% yield on 10-year US Treasury bonds is usually an ideal hedging tool for stock allocation, but the current market environment with rising consumer prices and interest rates is weakening demand. On the sidelines of the Citi Australia and New Zealand investment conference in Sydney, Woodruff said in an interview with the media on Tuesday, “Demand for hedging products has increased, but things are slightly different during this cycle.” Woodruff said, “The bond market is still facing some problems. Supply continues to increase, and neutral interest rates are rising, and these pressures themselves make bonds less prone to risk as in previous cycles.”

Mark Woodruff, CEO of Citigroup Australia, said the appeal of US bonds as a portfolio hedge is weakening as supply increases, continued inflation, and neutral interest rates rise. He said that the 5% yield on 10-year US Treasury bonds is usually an ideal hedging tool for stock allocation, but the current market environment with rising consumer prices and interest rates has weakened demand. On the sidelines of the Citi Australia and New Zealand investment conference in Sydney, Woodruff said in an interview with the media on Tuesday, “Demand for hedging products has increased, but things are slightly different during this cycle.” Woodruff said, “The bond market is still facing some problems. Supply continues to increase, and neutral interest rates are rising, and these pressures themselves make bonds less prone to risk as in previous cycles.”