Goldman Sachs Asset Management strategists: As the selling pressure in the bond market intensifies, the current yield levels provide a "contrarian buying opportunity."

In the chaos of surging 30-year U.S. Treasury bond yields to near 19-year highs and a global bond market epic sell-off, Lindsay Rosner, head of fixed income at Goldman Sachs Asset Management, has voiced a contrarian bullish view. In an interview on Tuesday, she explicitly stated that the current level of bond yields has provided investors with an extremely attractive structural entry opportunity. She believes that economic growth concerns triggered by the Iran war may eventually force the Federal Reserve to cut interest rates. Just the week before, the bond market was on the verge of losing control. Market data showed that during the early trading session in New York on Tuesday, there was a massive sell-off of 10-year and 5-year Treasury futures contracts within just an hour, with volumes equivalent to around $15 billion in spot Treasury bonds. The 30-year U.S. Treasury bond yield briefly broke through the 5.20% level, reaching the highest level since 2007, on the eve of the global financial crisis. The 10-year U.S. Treasury bond yield rose by 4 basis points to 4.667%, reaching 4.687% intra-day, hitting a new high since January 2025. The preliminary reading of the University of Michigan's Consumer Confidence Index in May dropped to 48.2, further decreasing by 3.2% from the previous month, and falling by 7.7% year-on-year, marking the lowest level since records began in 1952. Over a third of respondents directly listed the continuous rise in oil prices as the number one threat to their lives, with average gasoline prices soaring by over 50% since the outbreak of the Iran war. Rosner pointed out in the interview that the recent sharp rise in yields, with the 30-year U.S. Treasury bond yield hitting near 19-year highs, is directly attributable to the inflationary impact of the Middle East conflict. The closure of the Strait of Hormuz disrupted oil transport routes, forcing central banks around the world to address price pressures. "All of this is driven by inflationary shocks, and these are the direct consequences of the Iran war," Rosner explained. "Currently, oil cannot be transported through the strait, and central banks worldwide must deal with inflation issues." This impact has already surpassed the U.S., with European economies particularly vulnerable due to their higher dependence on imported energy. Furthermore, renewed concerns about fiscal conditions and the continued rise in debt-to-GDP ratios are also driving up yields globally. Despite the challenging environment and the increased probability of Fed rate hikes, Rosner still sees opportunities. She said, "If economic growth really deteriorates, the Fed will be forced to cut rates, providing an interesting entry point." Goldman Sachs currently maintains its forecast of two rate cuts totaling 50 basis points, but the timing has been pushed back to December and the beginning of next year, as the Fed needs to wait for the impact of oil price shocks on broader inflation indicators to become clearer.