Treasury yields are climbing again, but this time it’s not just about inflation or the Fed. It’s about politics, policy, and a little something called “bond vigilance.”

As President Donald Trump's team flexes its fiscal muscle, pushing tax legislation and emphasizing long-term debt discipline, Wall Street is reading the tea leaves. It’s sprinting to the front of the yield curve. The BNP Paribas forecast of a 4.25% 10-year yield by the end of 2025 isn't helping investor nerves.

But for many, the strategy is simple: don't fight the yield, just keep it short.

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The $25 Billion Bill Binge

In 2025 alone, investors have poured over $25 billion into ultra-short bond ETFs like the iShares 0-3 Month Treasury Bond ETF (NYSE:SGOV). Inflows into ultra-short bond ETFs were second only to the S&P 500 ETF in new inflows this year, reported CNBC. The SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:BIL) and the Vanguard Short-Term Bond Index Fund ETF (NYSE:BSV) aren't far behind.

Why the rush into these seemingly sleepy securities? Because they’re quietly delivering—and investors have noticed.

The 3-month T-Bill now yields over 4.3% – higher than the 2-year and nearly matching the 10-year, without the duration risk. In a year dominated by uncertainty over the Fed's path, policy whiplash, and geopolitical noise – stability and predictability are the real alpha.

Warren Buffett Owns 5% Of The Market

"Long duration just doesn't work right now," says Strategas Securities' Todd Sohn. Warren Buffett seems to agree—his Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) now owns a stunning 5% of the entire short-term T-bill market.

And behind the scenes, Trump's advisors are reportedly focused on keeping long-term rates in check. Treasury Secretary Scott Bessent has signaled a pivot toward more short-term debt issuance and regulatory tweaks to ease pressure on yields.

BNP Paribas strategist Tim High calls it "bond vigilance," a sort of fiscal hawkishness that aims to calm the bond market without relying on the Fed.

But for the market, that vigilance is turning into a signal. The long end may be politically volatile, but the front end is flush with yield – and less drama. Investors chasing safety, yield, and clarity have found a perfect storm in 0-3 month paper.

Call it the year of the ultra-short bond: it's catching Buffett's eye, staying on Trump's radar, and winning over Wall Street.

Read Next:

• Peter Schiff Calls Out ‘The Big Short’ Investor Steve Eisman For Dismissing Gold And US Debt Concerns: ‘The Irony Is Incredible’

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