Twists in the bond market
What investors should know about rising long-term yields, Treasury buybacks and the Fed’s next moves
By the Chief Investment Office, featuring insights from Chief Investment Officer Chris Hyzy and Mark Cabana, co-head of Global Rates Strategy, BofA Global Research
THE BOND MARKET IS SENDING INVESTORS powerful, and sometimes conflicting, signals. Longer-term yields have risen sharply as inflation pressures, geopolitical uncertainty and heavy borrowing add to market volatility. At the same time, the U.S. Treasury’s expanded buybacks of longer-dated debt have introduced another twist, raising questions about liquidity and the direction of the yield curve.
In the video above, Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, speaks with Mark Cabana, co-head of Global Rates Strategy for BofA Global Research, about what's driving the rise in yields and how the Treasury and Federal Reserve could respond as markets predict a prolonged hiking cycle. “The bottom line is big repricing, big shift in thinking from the Fed,” Cabana says.
Watch and learn:
- Whether Treasury buybacks amount to yield curve control
- The tools policymakers can use to support bond-market liquidity
- How longer-term yields could influence the Fed’s ongoing decisions on short-term rates
- Potential rate scenarios through year-end and into next year
Cabana also underscores potential surprises that may come across investors’ radars, from commodities and elections to geopolitics and trade: “Probably, if history is any guide, there will be something that we're not even thinking about today that will be top of mind for us in the next 6 to 12 months.”
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Important information
The opinions expressed are as of 9/10/2026 and are subject to change. Investing involves risk, including the possible loss of principal.
Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).
BofA Global Research is research produced by BofA Securities, Inc. (“BofAS”) and/or one or more of its affiliates. BofAS is a registered broker-dealer, Member SIPC, and wholly owned subsidiary of BofA Corp.
