C · News · 20261020N

Interest Rate Environment

CITIGROUP INC · 2026-10-20 · Importance 7 · Surprise 6

Citi Australia CEO Mark Woodruff said U.S. Treasuries are becoming less attractive as portfolio hedges because of increasing Treasury supply, persistent inflation, and rising neutral interest rates. He said a 5% yield on 10-year U.S. government bonds would traditionally offset equity risk, but higher consumer prices and interest rates have reduced demand for Treasuries as a hedge. The commentary indicates a changed interest-rate and inflation backdrop affecting fixed-income portfolio construction and potentially Citi’s markets activity.

Key facts

• Mark Woodruff, Citigroup Inc.'s top Australia banker, said Treasuries are becoming less attractive as a portfolio hedge due to increasing supply, persistent inflation, and rising neutral rates. source