The Federal Reserve’s policy reversal on interest rates has driven benchmark yields to the lowest levels in more than a year. For stock investors, the environment of falling rates is now favoring one particular sector: consumer staples.
“By contrast Consumer Staples which are still priced for a significantly higher 10y yield (closer to 3%), would be the preferred play, with upside even if rates and growth stay at current levels, more so if they decline further,” Chadha said.
The U.S. 10-year Treasury yield touched new 14-month low Wednesday. Yields move the opposite of prices.