Barclays is bullish on the three-year US Treasury bonds, expecting the yield curve for the 3-30 year maturity bonds to steepen further.

Barclays strategists Anshul Pradhan and Demi Hu stated in a report that the bank is maintaining a long position in three-year US Treasury bonds, as the interest rate market currently expects interest rate cuts to continue until 2027. The bank also continues to expect that the yield curve for three-year and 30-year US Treasury bonds will steepen. They said, "We maintain these views because the terminal interest rates of the loose cycle have room to go down." They added that, at the same time, the risk of fiscal deficits should put pressure on the longer end, especially in terms of swap spreads. They stated that the US Treasury market currently expects the loose cycle to be delayed compared to a month ago but more profound, leading to the three to five-year part of the curve becoming more expensive.