BlackRock Says the Market Has the Fed Wrong. It's Buying Treasuries With Yields Above 5%

BlackRock’s Investment Institute has made its most aggressive bond-allocation shift since 2020, moving from stocks into Treasuries as it argues the market misreads Fed tightening. On October 12, 2026, it ended a Treasury underweight strategy that began in October 2020, when the ten-year yield was about 0.9%. In its weekly note, it said it is upgrading shorter-term Treasuries to overweight and moving long-term Treasuries to neutral, citing yields above 5% offering better compensation for rate risk. The reallocation was funded by closing a long-held U.S. equity overweight to neutral, with iShares SHY and TLT barely moving.