TLT could very likely sell off on a rate cut - especially as it could engender inflationary price action like a weaker dollar, or increase government spending. TLT is NOT the Fed Funds Rate.
TLT could very likely sell off on a rate cut - especially as it could engender inflationary price action like a weaker dollar, or increase government spending. TLT is NOT the Fed Funds Rate.
I agree. Too much consensus is normally a red flag for me, but we're also in a small echo chamber here, judging from TLT inflows. It wouldn't surprise me, however, if TLT rallies hard in the interim period before the next secular decline begins.
The big wild card is whether we might get aggressive YCC on the long end. Maybe the Treasury's new buyback program will be expanded. Not really sure how that will affect TLT?
Agree 100% - and I think that's part of the Fed's reasoning for resisting rate cuts. They don't want to lose control of the long end of the yield curve.
TLT could very likely sell off on a rate cut - especially as it could engender inflationary price action like a weaker dollar, or increase government spending. TLT is NOT the Fed Funds Rate.
I agree. Too much consensus is normally a red flag for me, but we're also in a small echo chamber here, judging from TLT inflows. It wouldn't surprise me, however, if TLT rallies hard in the interim period before the next secular decline begins.
The big wild card is whether we might get aggressive YCC on the long end. Maybe the Treasury's new buyback program will be expanded. Not really sure how that will affect TLT?
Agree 100% - and I think that's part of the Fed's reasoning for resisting rate cuts. They don't want to lose control of the long end of the yield curve.