TLT trades below $82 for first time since 2004 as bond rout deepens

[Treasury bonds is shown on the conceptual business photo]
Andrii Dodonov/iStock via Getty Images

The selloff in U.S. Treasury bonds intensified Friday, pushing the iShares 20+ Year Treasury Bond ETF (TLT [https://seekingalpha.com/symbol/TLT]) below $82 for the first time since 2004.

The sharp decline reflects mounting pressure [https://seekingalpha.com/news/4622859-bond-market-sell-off-sweeps-the-curve-as-yields-climb-across-the-board] across long-duration government debt as U.S. Treasury yields advanced sharply, accelerating a market rout that gathered momentum following the Federal Reserve’s decision earlier in the week to hold rates steady again. Investor sentiment was particularly unsettled as three members of the Federal Open Market Committee dissented from the Fed's policy decision in favor of a rate hike due to inflation concerns. As such, bond traders are reportedly paying the highest premiums [https://seekingalpha.com/news/4622902-premiums-to-hedge-against-a-deeper-u-s-bonds-selloff-as-getting-too-expensive-report] since March to protect against a further climb in longer-dated yields.
[Seeking Alpha]
Seeking Alpha

The renewed yield spike has dealt a severe blow to long-term Treasury funds. Year-to-date, (TLT [https://seekingalpha.com/symbol/TLT]) has fallen nearly 7%, and it now stands more than 52% below its all-time high set in 2020. Financial commentators like Peter Schiff noted that when adjusted for inflation, real losses for long-term bond investors are even steeper, reigniting debates over the risk profile of long-duration U.S. debt in a persistent inflation environment.

From a historical standpoint, a decline to these levels remains extraordinarily rare. Out of all trading sessions since the ETF's inception in 2002, there have been only 23 days where TLT closed lower than Friday's trading level near $82, representing less than 0.5% of its total history, according to Bespoke Investment Group.

[Bespoke Investment Group]
Bespoke Investment Group

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