Bond Market Rallies As Recession Worries Mount, Rate Cut Bets Gain Steam Ahead Of Jobs Data
Portfolio Pulse from Piero Cingari
Long-dated U.S. Treasuries are rallying due to weak economic data, leading to increased expectations of a Federal Reserve rate cut in September. The iShares 20+ Year Treasury Bond ETF (TLT) and Pimco 25 Year Zero Coupon U.S. Treasury Index ETF (ZROZ) have seen significant gains, breaking key technical levels.
June 04, 2024 | 4:19 pm
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The iShares 20+ Year Treasury Bond ETF (TLT) has climbed to $92, breaking above its 50-day moving average and its declining trend channel for 2024, indicating a potential trend reversal.
TLT's recent performance, breaking above key technical levels, suggests a potential trend reversal. This is driven by weak economic data and increased expectations of a Fed rate cut, which are positive for long-term bonds.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
The Pimco 25 Year Zero Coupon U.S. Treasury Index ETF (ZROZ) has surged as much as 6% over the last four days, benefiting from the same economic conditions driving TLT.
ZROZ has seen significant gains due to the same factors affecting TLT: weak economic data and increased expectations of a Fed rate cut. This environment is favorable for long-term zero-coupon Treasuries.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 90