Investors Flock to Treasuries Despite Powell's Caution

Despite Federal Reserve Chair Jerome Powell's warning of potential interest rate hikes, some investors are finding US Treasuries attractive due to their high yields. Western Asset Management and JPMorgan Chase & Co. are among those maintaining bullish bets on fixed income, arguing that even with rate hikes, the income from the highest yields since 2007 outweighs potential losses. Treasury yields have retreated, suggesting the worst of the rout may be over. However, hedge funds have increased their bearish bets on Treasuries, while real-money investors are betting on a rebound. Two Treasury auctions on Monday will gauge investor appetite for higher yield levels.