TLT a look at inflation expectations shows it's not inflation the market is worried about (contrary to my prior post). Could be lack of foreign demand (liberation day?), excessive government debt (big beautiful bill), or ironically an expectation that enhanced productivity (AI) means rock bottom rates aren't warranted decades down the road.
TLT here's an ominous chart showing how the long end broke loose earlier this year. While the Fed has some tools to manipulate long dated paper, premature cuts could be disastrous -- calling all bond vigilantes 🤺🤺
TLT It took a while, but TLT has finally taken out last month's high, as the MBA Purchase Index was down last week and again today. I continute to hold.
TLT rumors are swirling that the Treasury may begin issuing more short dated debt than long dated, which would limit supply at the long end and put upward pressure on the price.
Enjoy the ride if that comes to fruition, but don't mistake it for genuine demand.
After taking profits on TLT ahead of the Fed announcement, I've reloaded today, and will add on weakness. I really struggle to think of a realistic scenario that would lead to higher long-term rates in the near future.
Since the Fed rate cut on the 17th just one week ago, TLT has declined by over 1%. Continued curve steepening as time wears on is a strong possibility.
TLT a look at inflation expectations shows it's not inflation the market is worried about (contrary to my prior post). Could be lack of foreign demand (liberation day?), excessive government debt (big beautiful bill), or ironically an expectation that enhanced productivity (AI) means rock bottom rates aren't warranted decades down the road. 
