Government bond yields have risen materially this year, with 10-year yields in the UK and US now above 5%, prompting investors to ask whether it is time to buy. Fidelity says that if inflation averaged close to the 2% target, current yields could mean a real return of roughly 3%, but it is not yet buying. The firm points to three risks: persistent government borrowing and deficits, heavy corporate issuance tied to AI, with hyperscalers issuing more than $220bn of bonds in 2026 by early September, and geopolitical tensions in the Middle East and Ukraine that could keep inflation elevated. Fidelity believes government bonds are becoming more attractive but investors are not yet fully compensated, so it prefers shorter-maturity securities.
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Original headline: Fidelity : Government bonds look attractive , but were not buying yet
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