Expect more structural support for higher yields over the medium term, says Citi's Kate Moore

• Citi Wealth CIO Kate Moore is cautious on long-duration bonds, having been underweight fixed income and allocating to shorter-duration bonds and gold.
• The recent spike in Treasury yields (e.g., 10-year above 5%, 30-year above 5.4%) is driven by higher real yields and structural growth, with fiscal deficits also playing a role.
• Moore suggests challenging the traditional 60/40 portfolio, advocating for more flexible, outcome-oriented investing with less correlated assets like commodities, gold, and infrastructure, as bonds are no longer acting as reliable portfolio ballast.

Citi Wealth CIO Kate Moore discusses the recent surge in Treasury yields, attributing it primarily to higher real yields and structural growth rather than inflation. She maintains a cautious stance on long-duration bonds, advocating for a re-evaluation of traditional 60/40 portfolios to include less correlated assets like gold and infrastructure, as bonds are no longer reliably acting as portfolio ballast.