After traveling to Memphis, Tennessee, pay respects to Elvis Presley at Graceland, then take a short drive to FTN Financial to partake in some of the best bond-market advice to be found anywhere.

Working for a firm based about 1,000 miles (1,600 kilometers) from Wall Street with roots that date back to the Civil War, FTN’s Jim Vogel and Chris Low were among the few who correctly urged investors to ignore the consensus calling for an inevitable selloff in bonds this year. Since at least 2011, FTN’s head of interest-rate strategies and chief economist have rightly gone against the pack by calling for low yields.

While the bears point to signs of budding inflation and reduced purchases by the Federal Reserve as reasons to stay away from bonds, FTN says Treasuries -- the global benchmark for everything from home mortgages to emerging-market debt -- are years away from reverting to pre-financial crisis levels as the labor market struggles. Getting it right has never been more important after a borrowing binge helped push the amount of debt globally to $100 trillion from $70 trillion in 2007.

“If you don’t expect interest rates to go back to where they were in the last cycle, you’re essentially asserting that something is very different in this cycle,” Low, 49, said in a June 24 telephone interview. “You can make that case more easily with every year that goes by when growth remains weak and several hundred thousand people fall out of the labor force.”

Bond Rally

Bond investors following consensus forecasts would have missed out on global returns this year that average 4.2 percent, the best since at least 1997 when Bank of America Merrill Lynch indexes began tracking the data. Treasuries have returned 3.1 percent after losing 3.4 percent in 2013.

FTN, with offices 11 miles from the musical gates to Graceland, was one of 12 forecasters in a Bloomberg News survey of 67 in January that predicted yields on Treasury 10-year notes would be below 3 percent by June 30. FTN’s forecast of 2.6 percent compared with 2.52 percent as of 8:40 a.m. in New York.

Economists and strategists say they weren’t wrong, just early. The median estimate in a survey taken from June 6 to June 11 is for yields to end the year at 3.07 percent. Vogel and Low are calling for 2.55 percent.

FTN lowered its estimate today for the near-term range for the 10-year yield to 2.48 percent to 2.62, from 2.55 percent to 2.68 percent, citing “deteriorating expectations for the economy along with gradually shifting central-bank policies,” in a note to clients.