BlackRock Inc., the world’s largest money manager, says investors should pare their Treasury holdings because the U.S. will avoid a recession.

“Economic indicators this week may show the U.S. economy experienced a mild slowdown but is not headed for a recession,” Richard Turnill, the global chief investment strategist, wrote in a report on the company’s website. Investors should have an “underweight” position in Treasurys, according to the report. New York-based BlackRock manages $4.6 trillion.

U.S. 10-year note yields were unchanged at 1.91 percent as of 7:06 a.m. in London, according to Bloomberg Bond Trader data. The price of the 1.625 percent note due in February 2026 was 97 13/32.

Treasurys have fallen 0.7 percent in March, heading for their first losing month this year, based on the Bloomberg World Bond Indexes. The market is sliding as the U.S. economy shows signs of improvement, highlighted by a February jobs gain that was bigger than economists surveyed by Bloomberg projected. 

Manufacturing increased in March, according to a Bloomberg survey of economists. Orders for durable goods fell in February, based on the surveys ahead of the government figures March 24.

Inflation’s Impact

Quickening inflation will help push Treasurys down, said Hideaki Kuriki, a debt investor at Sumitomo Mitsui Trust Asset Management, which oversees $59.5 billion.

“The American economy is recovering and American inflation is recovering,” Kuriki said. “Treasury yields will go up.”

The difference between yields on 10-year notes and same- maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, was 1.67 percentage points Monday. It was the highest level since August. It’s still less than the average for the past decade of 2.08.