Latest news with #YearTreasuryBondETF
Yahoo
a day ago
- Business
- Yahoo
TLT Slides as Fixed-Income Investors Brace for CPI Report
Long-term bond investors are on edge ahead of Tuesday's Consumer Price Index (CPI) reading, as the iShares 20+ Year Treasury Bond ETF (TLT) slipped two days in a row, reflecting growing concerns over upcoming inflation data. The cautious sentiment comes as markets brace for tomorrow's CPI release, which will reveal June's inflation data. TLT fell 0.5% midday, following Friday's 1.4% decline. The expectation for a higher inflation reading, largely pushed up by the bond market's concerns of tariff-induced price increases, is also driving Treasury yields higher, as yields move inversely to bond prices. The median forecast for June's CPI is a significant 2.7% increase, a notable acceleration from the previous month's 2.4% reading. This anticipated uptick reflects various pressures, with investors particularly keen to see if President Donald Trump's recently implemented "reciprocal tariffs" are beginning to ripple through to consumer prices. The tariffs, including a 10% baseline on nearly all imports and higher rates on goods from countries like China, are expected to raise import costs, which might be passed on to consumers and contribute to broader inflationary trends. Market participants will scrutinize the data for any specific categories showing unusual price hikes that could be linked to these new trade policies. Despite the widespread expectation for a higher CPI reading, a surprise to the downside remains a possibility. Consumer sentiment, as indicated by recent surveys, continues to hover at relatively low levels. This caution among consumers, combined with a potential slowing in overall demand as the economy digests higher interest rates and economic uncertainty, may keep prices in check more than anticipated. It's plausible that the market's fear of tariff-induced inflation might be overblown in the short term or that businesses are absorbing some of the costs rather than fully passing them on. Meanwhile, TLT's price is hovering near multi-year lows, reflecting that long-term Treasury yields—particularly the 10-year yield (currently at 4.44%) and the 30-year yield (at 4.99%)—are near multi-year highs as the bond market prices in persistent inflation. As we look ahead, the market fully expects the Federal Reserve to hold steady at its next Federal Open Market Committee (FOMC) policy decision meeting on July 25. The Fed has consistently emphasized its data-dependent approach and, while a higher CPI reading would reinforce their cautious stance, they are unlikely to react immediately with a rate hike. However, the Fed Funds futures market, which reflects trader expectations for future interest rates, currently gives a substantial 65% probability of a rate cut in September. This suggests that while near-term inflation is a concern, the market still believes the Fed will eventually need to ease monetary policy, likely in response to a slowing economy or sustained disinflationary trends emerging later in the year, despite the current inflationary pressures. The interplay between these immediate inflation concerns and the longer-term economic outlook will continue to drive market movements following tomorrow's crucial CPI release. Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions. At the time of publication, Kent Thune did not hold a position in any of the aforementioned | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
30-06-2025
- Business
- Yahoo
'Buying Bonds In Europe Is Phenomenal': BlackRock's Rieder
BlackRock Global Fixed Income CIO Rick Rieder discusses the iShares Flexible Income Active ETF (ticker: BINC) and says "buying bonds in Europe is phenomenal." He also discusses the iShares 20+ Year Treasury Bond ETF (ticker: TLT) in an interview with Katie Greifeld, Eric Balchunas and Scarlet Fu.
Yahoo
02-06-2025
- Business
- Yahoo
BlackRock's ‘Widow Maker' ETF Is Suddenly in High Demand
With a nickname like 'widow maker,' you'd think investors would stay away. The iShares 20+ Year Treasury Bond ETF (TLT), which got its moniker because of its recent poor performance — took in $1.3 billion assets in the past week, according to CFRA Research. Since long-term Treasury bonds are more susceptible to the effects of interest rate changes as they mature, short or intermediate bonds are often more appealing. And for TLT, if investors bought the fund five years ago, they would have lost some 45% of their original assets, according to the Financial Times. But, it looks like long-term products are increasingly on the menu. 'TLT is often used by investors to buy the dip when they think [Fed interest] rates have peaked,' said Aniket Ullal, head of ETF Research & Analytics at CFRA. 'We may be seeing similar behavior here since inflation numbers have been fairly benign recently.' READ ALSO: Nasdaq Wants to Wrap This $11.5B Altcoin in an ETF and Vanguard's 2 New Muni ETFs Have an Advantage Over Mutual Funds The bond market had a small win last week as both 20-year and 30-year Treasury yields began trading just below 5%, the first time since May 20. And while President Donald Trump doesn't have the authority to lower interest rates, he's made his position well known, recently telling Fed Chair Jerome Powell he's making a 'mistake' by not lowering them. Plus, who could forget all that volatility? All this could be contributing to TLT's momentum. 'Investors in long-term Treasury bond ETFs like TLT will win if the US economy weakens significantly and investors believe the Fed will need to cut rates aggressively,' said Todd Rosenbluth, head of research at VettaFi. However, he noted that TLT doesn't have the strongest track record, and taking on significant duration risk has not been rewarding for investors: Over the past five years, the fund has taken in roughly $50 billion in inflows, per VettaFi data. But, its performance is down nearly 50% in that same time. 'Timing this trade can be very difficult,' Ullal told Advisor Upside. This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
TLT Finds Buyers as 30-Year Yield Tests the Big 5% Level
The yield on the 30-year U.S. Treasury briefly surged to 5.15% last week, its highest level since late 2023. Though it has since retreated to around 4.95%, the long bond remains stubbornly close to the psychologically important 5% mark. This isn't the first time the 30-year has breached that level in 2025. In fact, it's happened multiple times for different reasons. Last week's jump came after the House passed President Donald Trump's sweeping tax cut package, stoking fears of ballooning budget deficits and a rising national debt. Back in April, it was concerns over Trump's trade war and speculation that foreign investors could pull back from U.S. government bonds that caused yields to jump. And in January, the bond market responded to expectations that Trump's economic agenda, centered around tax cuts and tariffs, would spur faster growth and inflation, while keeping the Fed sidelined following its short-lived rate-cutting stint in 2024. Whatever the reason, the Treasury market remains on edge. The 5.15% high from last week was just shy of the 5.18% peak seen in October 2023, when the Fed's aggressive rate hiking campaign drove long-term yields to cycle highs in response to the inflation surge of 2021-2022. While those acute inflation fears have faded somewhat, they haven't disappeared. And many investors are coming to terms with the idea that inflation may settle at a structurally higher level than in the pre-Covid era, driven by long-term trends like tighter labor markets, reduced immigration and deglobalization. These factors, combined with increased Treasury issuance tied to rising deficits, are putting upward pressure on interest rates, particularly at the long end of the curve. Despite these pressures, many investors are sticking with, and in some cases—doubling down on—long-term Treasurys. The iShares 20+ Year Treasury Bond ETF (TLT) saw more than $2 billion of inflows last week. The $48.8 billion fund has long been a go-to vehicle for investors seeking exposure to the far end of the Treasury curve. With an effective duration of 15.5 years, TLT is highly sensitive to rate moves, making it attractive for those expecting yields to eventually fall. It's also commonly used as a portfolio hedge. If the economy stumbles or a risk-off environment emerges, long-term Treasurys often rally. That was the classic dynamic, anyway. In recent years, though, that bond-stock inverse correlation has weakened. For example, during the April 2025 selloff—when the S&P 500 tumbled more than 11% between March 31 and April 8—TLT also fell by 2.6%, failing to provide its usual ballast. So far this year, the S&P 500 is down 0.7%, while TLT is off 1.4%. Even so, investors aren't giving up on long bonds. In a world of elevated interest rates and greater rate volatility, funds like TLT remain useful for both directional bets and risk management. For those seeking even more rate sensitivity, there's the PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ), which holds Treasury STRIPS and has a duration of 27.6 years. Meanwhile, the US Treasury 30 Year Bond ETF (UTHY) offers more targeted exposure. Unlike TLT, which holds a range of bonds with maturities between 20 and 30 years, UTHY focuses exclusively on the most recently issued 30-year Treasury bond. Its duration is around 15.5 years, similar to TLT. As long as markets remain jittery over debt and inflation, expect long bond ETFs to stay in the | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-04-2025
- Business
- Yahoo
Fixed-Income ETF Assets to Hit $6T by 2030: BlackRock
Fixed-income ETFs are on track to reach $6 trillion in assets under management (AUM) by 2030, if not sooner, according to BlackRock's annual outlook published Wednesday. The forecast comes after global bond exchange-traded fund assets increased 20% in 2024—the highest organic asset growth of any other asset class or investment vehicle—pushing AUM to $2.6 trillion. Relative to their equity counterparts, fixed-income ETFs are in their early stages with significant opportunity for growth: Equity ETFs represent 10% of its respective underlying market while fixed-income ETFs represent just 2%. Interest in these ETFs isn't showing signs of slowing. Through March 2025, global bond ETF flows reached $131.6 billion, which is more than double the average first-quarter inflows over the last decade. This growth is in part due to innovation offering investors more choice. In 2024, the industry launched 420 bond ETFs—a one-third increase from the year before—and more than 75 bond ETFs have already been issued in 2025. 'Fixed-income ETFs have allowed investors to reposition portfolios given the recent market volatility,' Karen Veraa-Perry, head of iShares U.S. fixed income strategy at BlackRock, told She added that the firm has seen an uptick in inquiries from a range of clients looking to use ETFs to access collateralized loan obligations (CLOs) and treasury inflation-protected securities (TIPS) and boost yield in their portfolios. The report also notes a significant increase in liquidity and trading volumes for these ETFs: The average daily volumes of fixed-income ETFs have more than doubled over the last five years. The iShares 20+ Year Treasury Bond ETF (TLT) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG) have seen record trading volumes, Veraa-Perry said. Bond ETFs are 'particularly powerful' during times of market volatility, such as during the onset of President Donald Trump's tariff announcements earlier this year, and tend to experience record volumes while maintaining market quality, according to the report's authors. Yields are also higher than they have been in years, with roughly 80% of global fixed-income assets now yielding more than 4%. Money market ETFs and short-term government bond ETFs, such as the iShares 0-3 Month Treasury Bond ETF (SGOV), have also been effective tools for reducing portfolio volatility and have seen strong inflows year to date, Veraa-Perry said. Permalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
