--- title: "The 30-year U.S. Treasury bond has surpassed 5.2%. Experts advise against being greedy for high interest rates, suggesting that retirement income should be \"short rather than long,\" and to keep 70% of funds in low-risk corporate bonds" type: "News" locale: "en" url: "https://longbridge.com/en/news/294590053.md" description: "The yield on the 30-year U.S. Treasury bond has surpassed 5.2%, reaching a recent high, which has drawn the attention of retirees. Senior investor Liao Jiawei suggests \"short is better than long,\" indicating that long-term bond prices are highly volatile and carry higher risks. He recommends that retirees first use 30% of their funds to purchase approximately 3-year short-term bonds to lock in returns, while the remaining 70% should be deployed in 5 to 7-year bonds or stable corporate bonds after the market corrects, in order to actively manage risks and maintain control over the portfolio" datetime: "2026-08-01T22:09:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294590053.md) - [en](https://longbridge.com/en/news/294590053.md) - [zh-HK](https://longbridge.com/zh-HK/news/294590053.md) --- # The 30-year U.S. Treasury bond has surpassed 5.2%. Experts advise against being greedy for high interest rates, suggesting that retirement income should be "short rather than long," and to keep 70% of funds in low-risk corporate bonds The Federal Reserve recently held a meeting and, as expected by the market, kept interest rates unchanged. However, the post-meeting statement and the chairman's remarks did not clearly hint at a path towards rate cuts, leading the market to anticipate another rate hike in September. Following the meeting, U.S. long-term bond yields surged, with the 30-year Treasury yield breaking above 5.2%, reaching a new high since 2007; the 10-year yield also rose to over 4.7%. The rise in long-term yields has prompted many "income-seeking individuals" to consider entering the market to buy bonds and lock in higher returns over a longer duration. Senior bond investor and founder of the "Bond Traffic Light," Liao Jiawei, stated in an interview with Sing Tao Daily that retirees looking to build a bond income portfolio should not invest all their funds in the market at once. He suggested initially using about 30% of their funds to purchase shorter-term bonds, around 3 years in duration, using U.S. Treasury bonds as an example to "lock in" a return of about 4.3% as the foundation of their income portfolio. ## Bank bonds maturing in about 2 years also yield 4.7% Liao Jiawei explained that his personal judgment is that the Federal Reserve will raise rates once this year, but he believes the market should not be overly sensitive to the number of rate hikes. He estimates that if a rate hike leads to a significant correction in the stock market, some corporate bond prices may also adjust downward simultaneously, potentially creating relatively attractive entry points. Investors could consider using the remaining 70% of their funds to deploy bonds with maturities of about 5 to 7 years. He pointed out that investors do not necessarily have to buy U.S. Treasury bonds; they could also consider bank bonds, such as those issued by HSBC, which currently have products maturing in about 2 years with yields around 4.7%; those maturing in about 6 years yield over 5.6%, which is also decent, while maintaining relatively stable credit quality. Liao Jiawei emphasized that retirees in the "income-seeking" group should try to "turn passivity into proactivity" when deploying their income portfolios. He candidly stated, "The market is always filled with noise; how many times rates will be raised and when inflation will fall is always uncertain." Rather than being led by the market, it is better to actively divide funds into two parts to manage risk, controlling investment proportions and selecting shorter-term bonds to lock in returns, thereby regaining control over the entire portfolio. ## Price volatility is significant; retirees should avoid long bonds Regarding longer-term bonds, although they offer higher yields, Liao Jiawei reminded that their price volatility risk is also relatively high, as long bonds have a longer duration, making them much more sensitive to changes in yield compared to short bonds. He used a 5% coupon bond as an example: if the yield to maturity rises by 2%, the price of a 20-year long bond would need to drop by about 21%, which is more than 2.5 times the decline of a 5-year bond (which would drop by 8%). Therefore, for retirees, holding these long bonds with maturities of 20 to 30 years could lead to significant losses if they need to liquidate unexpectedly during a bond bear market. 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