Treasury Yields Reach 5-Month High, Lift Mortgage Rates; Expert Warns 'Federal Debt Blob Is Out Of Control'
Portfolio Pulse from Piero Cingari
Treasury yields have reached a 5-month high, impacting the U.S. mortgage market by driving mortgage rates higher. The iShares 20+ Year Treasury Bond ETF (TLT) has seen a nearly 10% decline year-to-date due to rising yields. The increase in yields is attributed to concerns over the growing federal deficit, with experts warning about the potential negative effects on the economy and investor sentiment. Technical analysis suggests a continued uptrend in yields, with potential resistance levels ahead.
April 24, 2024 | 4:22 pm
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NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) has experienced a nearly 10% decline year-to-date, influenced by the rising Treasury yields.
The direct correlation between rising Treasury yields and the performance of bond-related ETFs like TLT is evident. As yields increase, the price of existing bonds, and consequently bond ETFs, typically decrease. The article's focus on the negative year-to-date performance of TLT due to these rising yields supports a negative short-term impact. Additionally, concerns over the federal deficit could exacerbate the situation, potentially leading to higher yields and further declines in TLT's price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90