Since April, I've had a lot of conversations about whether Treasuries are still a viable safe haven investment. After “Liberation Day,” 10-year Treasuries sold off by ~50 basis points, creating a fear narrative among the advisor community that foreign buyers were dumping Treasuries. I understand why this narrative took hold. The tariff announcements produced something genuinely unusual in the market’s response: equities and Treasuries sold off while the dollar weakened, all at the same time (a combination which breaks from decades of historical pattern). For investors who have long counted on government bonds as ballast against equity volatility, that simultaneous drawdown was genuinely unsettling.
What I want to walk you through, though, is why I don't believe it changes the structural case for Treasuries.
When advisors push back on Treasuries and suggest rotating into gold or a similar alternative, I usually ask a version of the same question: at what scale? For smaller allocations, the comparison is reasonable. But the US Treasury market carries roughly $39 trillion in outstanding debt with daily trading volume north of $600 billion. No other asset absorbs institutional capital at that scale without moving the price. For pension funds and sovereign wealth funds (the investors most acutely affected by this), that level of liquidity is an operational requirement. Gold provides reasonable liquidity at smaller sizes, but it runs into real constraints under institutional-level flow conditions.
That's not a knock on gold as a portfolio holding. It solves different problems, and it does some of them well. The point is that scale changes the comparison more than the alternatives conversation usually accounts for.
With 10-year yields in the 4.3–4.7% range, Treasuries generate real income. That sounds obvious, but I think it also bears repeating. Neither gold, nor silver, nor bitcoin pay a coupon. For liability-driven investors managing against long-duration obligations, that income stream isn’t optional.
Put another way, alternatives that offer price appreciation potential without income do not solve the same fundamental problem, and shouldn’t be compared apples-to-apples.
The most common objection I hear against Treasuries is inflation sensitivity (fair, and worth taking seriously), and it usually arrives with gold as the obvious hedge. But Treasury Inflation-Protected Securities exist precisely for this situation. Their principal adjusts mechanically with CPI, offering an inflation hedge directly rather than through the indirect correlation that gold provides over long horizons.
I think this distinction gets systematically underweighted. Gold has historically tracked inflation across decades; it doesn't do it by design the way TIPS do.
Bitcoin hasn't demonstrated consistent behavior across a single full economic cycle yet, which makes drawing long-term inflation conclusions from it pretty speculative.
It’s also worth noting that real yields (i.e. nominal yield minus inflation) are in the positive territory for 10-year Treasuries, and are offering some real income
I'm not making the case against inflation-sensitive alternatives generally. A portfolio can hold both. The instrument specifically engineered for inflation protection just probably deserves more credit in that part of the conversation than it tends to get.
This is the part I find myself coming back to most often in these conversations, and I think it's genuinely underappreciated.
Every other asset in a portfolio is priced relative to Treasuries: they function as the discount rate for equities, the benchmark against which credit spreads are measured, the anchor for mortgage rates. An investor who eliminates explicit Treasury exposure hasn't removed their exposure to the Treasury yield curve… they've just stopped actively monitoring the thing they're still exposed to through everything else they hold. The rest of the portfolio continues to reference it, but the relationship just becomes more opaque.
Rotating out of Treasuries doesn't neutralize the yield curve's influence on your book… it just moves it off-screen.
And finally, if all that wasn’t enough… the US dollar remains the world's primary reserve currency; Treasuries are the foundational instrument of dollar-denominated global finance. Central banks and foreign governments hold them as an operational necessity more so than as a return-seeking investment. That structural demand base does not evaporate on the basis of short-term geopolitical anxiety (even when that anxiety is intense).
All of that being said, the April 2025 pattern was worth taking seriously. The simultaneous selloff across equities, the dollar, and Treasuries raised real questions about whether some foreign holders are reconsidering their US exposure. I don't want to wave that away.
But "tested investor confidence" and "tested the structural case" are two different things. The depth, the income (10-year yields have been running in the 4.3–4.7% range), the benchmark role… none of those changed in April 2025. The volatility was a sentiment event layered on top of fundamentals that remain intact.
For investors with genuine fixed income needs, the more productive question probably isn't whether to hold Treasuries at all, but whether current yields are actually being put to work across the full portfolio in a way that reflects their own clients' time horizons and liability structures.
That's a harder question than "Treasuries, yes or no?"... but it's also the more useful one.
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