Goldman Sachs: Ongoing Iran Conflict and Supply Shocks Weaken US Treasuries' Risk Diversification Ability

```htmlGolden Ten Data reported on May 18 that Goldman Sachs analysts said in a report that since the end of February, U.S. Treasury bonds have been a poor diversification tool. They noted: "Ongoing uncertainty surrounding the Iran conflict and supply shocks remain the main barriers preventing nominal duration from smoothing out daily portfolio volatility, which could keep the risk premium elevated in the short term." However, the analysts believe that the optimism about growth already priced into risk markets, as well as the more pronounced accumulation of inflation risk premium on the yield curve, have increased the value of U.S. Treasuries as a medium-term hedging tool.```