I'm trying to understand TLT dynamics and why it's jump up recently.

Discussion in 'Fixed Income' started by klattermusen, Jun 17, 2022.

    1. I'm not a bond expert by far. Can any connection be drawn between int rates going higher and TLT dropping. Is that how it works? I wonder since I'm trying to understand TLT dynamics and why it's moved up recently. Like from 108 to 112 yday/tday
    murray t turtle likes this.
  1. xandman


    Rates are going up in the short term treasuries. But, the long term rates have eased off the top signaling a flattening of the yield curve.

    We could even have an inversion that shows a slowdown is imminent.

    So, we may have the FED raising the Fed Funds Rate by .75 but you don't see the full amount being tacked onto the longer term rates. It could even be negative. And, it should because it shows the determination of the FED to kill inflation at the cost of a recession.
    Gambit, jys78 and klattermusen like this.
  2. jys78


    Look at the underlying holdings, specifically duration.
  3. The KISS explanation... "It's a 20-yr bond fund/ETF. When market is buying bonds, TLT goes up. When market is selling bonds, TLT goes down".

    Some think the TLT will be going up because of anticipated bond buying (interest rates have peaked and will soon be falling). Seems unlikely considering the Fed's plans to raise rates.

    Y'day's bounce might have been nothing more than short covering. And sometimes the market makes speculative plays that turn out to be totally wrong.

    Playing it by ear... stops as always.
    Last edited: Jun 17, 2022
    murray t turtle likes this.
  4. SunTrader


    Yahoo sez:

    The fund generally invests at least 90% of its assets in the bonds of the underlying index and at least 95% of its assets in U.S. government bonds. The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.

    And holdings (without identifying maturity):-

    Top 8 Holdings (46.59% of Total Assets)
    Name Symbol % Assets
    United States Treasury Bonds 1.88% N/A 8.66%
    United States Treasury Bonds 2.38% N/A 7.36%
    United States Treasury Bonds 2.88% N/A 5.87%
    United States Treasury Bonds 3.13% N/A 5.50%
    United States Treasury Bonds 3.00% N/A 5.42%
    United States Treasury Bonds 2.00% N/A 4.66%
    United States Treasury Bonds 3.38% N/A 4.63%
    United States Treasury Bonds 2.50% N/A 4.49%
  5. R1234


    The far end of the yield curve is not very much driven by short term policy rates. It's more directly affected by inflation expectations and risk-on/risk-off market regimes. What you're seeing now in the TLT is some upward mean-reversion after the extreme oversold bond market coupled with the risk-off environment in equities.
    xandman likes this.
  6. xandman



    The average maturity of Treasuries on the Fed’s balance sheet increased from about four years before the Great Recession to about eight years today.
  7. %%
    Market mostly sellin' \TLT cant even close above 50day moving average\ any ,all 2022.
    IF one likes a bottom bumping 52 week range TLT is near the bottom of that also.......
    Uptrends can happen on weak buy volume\ but TLT is trending down on any kind of volume.