sightLONG BONDS•May 26
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Longest-duration Treasury ETF down 60% as 30-year yield hits 5%
A Treasury bond ETF built to track the longest maturities has lost more than 60% since March 2020. That peak lined up with pandemic-era yields near 0.8% on the 30-year, which have since reset to above 5%.
This is what extreme duration risk looks like when rates move the other way. Long-dated bonds lock in low yields, so when the 30-year climbed to about 5.18%, prices had to fall hard. The same move is pushing up mortgage and credit costs while locking in deep mark-to-market losses across long-duration government debt.
This is what extreme duration risk looks like when rates move the other way. Long-dated bonds lock in low yields, so when the 30-year climbed to about 5.18%, prices had to fall hard. The same move is pushing up mortgage and credit costs while locking in deep mark-to-market losses across long-duration government debt.
Timeline3
Mar 1
The 30-year Treasury yield bottomed near 0.8% and the longest-duration Treasury ETF peaked during the pandemic bond rally.
May 19
The US 30-year Treasury yield reached about 5.18%, its highest level since July 2007.
May 25
Market commentary highlighted that the longest-duration Treasury ETF was down more than 60% from its March 2020 peak.
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May 26