Neutral/ Shorting Opportunity on TLT 20 Yr Bond Fund.
TLT Risk ON/OFF Indicator.
I was seeing the TLT rapidly decline, while 10 year yield rates are increasing. TLT is the 20 year bond fund. As short term rates are increasing, more people purchase of the 10 year bond, and less of the 20 year bond resulting in declining demand and declining price. Many are speculating the Federal Reserve Board may raise rates 50 bps or .5% to curb stubborn inflation. This would only make short term bonds more attractive than long term bonds, and there will be more of market for short term bonds. T think it could go either way 25 or 50 bps, and I am leaning toward 25 bps increase on March 15-16 by the Federal Reserve Board that the FOMC meeting.
Personal Anecdotal Opinionated Analysis conducted with the help of Mary.
This is also known as the yield curve inversion, when the yields of short term bonds are higher than long term bonds. This means that the dollar is getting stronger relative to other assets, and more attractive to hold compared to other assets, declining price of the other assets. shorter time horizon certainties are favored over long term time horizon certainties. Declining prices means that your dollar is getting more valuable relative to those same assets, when simply held in comparison to them. Less printing from the federal reserve reduces the supply of the money, while demand is increasing. This means the potential total accreted future value of the money locked in the 20 year bonds is less attractive than the potential money locked inside of the short term bonds,
I was seeing the TLT rapidly decline, while 10 year yield rates are increasing. TLT is the 20 year bond fund. As short term rates are increasing, more people purchase of the 10 year bond, and less of the 20 year bond resulting in declining demand and declining price. Many are speculating the Federal Reserve Board may raise rates 50 bps or .5% to curb stubborn inflation. This would only make short term bonds more attractive than long term bonds, and there will be more of market for short term bonds. T think it could go either way 25 or 50 bps, and I am leaning toward 25 bps increase on March 15-16 by the Federal Reserve Board that the FOMC meeting.
Personal Anecdotal Opinionated Analysis conducted with the help of Mary.
This is also known as the yield curve inversion, when the yields of short term bonds are higher than long term bonds. This means that the dollar is getting stronger relative to other assets, and more attractive to hold compared to other assets, declining price of the other assets. shorter time horizon certainties are favored over long term time horizon certainties. Declining prices means that your dollar is getting more valuable relative to those same assets, when simply held in comparison to them. Less printing from the federal reserve reduces the supply of the money, while demand is increasing. This means the potential total accreted future value of the money locked in the 20 year bonds is less attractive than the potential money locked inside of the short term bonds,