Despite the sharp drop in bond prices on Tuesday, fixed-income investors shouldn't sweat the dire warnings that bonds are severely overvalued, says Nomura's head of U.S. rates strategy, George Goncalves.
And while Goncalves does expect Treasury yields to rise over the course of 2015 (pushing bond prices down, given that yield and price move inversely) he says the path is likely to be a slow one, with many obstacles standing in the way of a sudden yield surge.
When it comes to the 10-year yield, Goncalves expects "a gentle grind higher in rates toward around 2.4 [percent] on the year, as long as the economy can handle it," he said Tuesday on CNBC's "Futures Now."
Even with the huge rise in yields on Tuesday, that is still more than an additional quarter of a percent in yield above current levels around 2.14 percent. Yet Goncalves doesn't think yields can maintain their incredible pace of late.
"I think it's going to be really tough getting through the 2.25 level," he said. "It looks like we're trying to do a beeline toward it in the next day or so, [but] that would be a great buying opportunity because it's not going to be a straight shot higher."