{"id":64340,"date":"2023-09-22T19:05:41","date_gmt":"2023-09-22T23:05:41","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/etfs-that-buy-long-term-treasury-bonds-drop-sharply-after-fed-signals-higher-for-longer-rates\/"},"modified":"2023-09-22T19:05:45","modified_gmt":"2023-09-22T23:05:45","slug":"etfs-that-buy-long-term-treasury-bonds-drop-sharply-after-fed-signals-higher-for-longer-rates","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=64340","title":{"rendered":"ETFs that buy long-term Treasury bonds drop sharply after Fed signals higher for longer rates"},"content":{"rendered":"
\n

Exchange-traded funds that invest in long-term Treasury bonds dropped Thursday, as yields continued their march higher in the wake of the Federal Reserve\u2019s meeting on monetary policy.<\/p>\n

Shares of the Vanguard Long-Term Treasury ETF
\n VGLT
\n finished with a sharp 2.3% drop, while the iShares 20+ Year Treasury Bond ETF
\n TLT
\n sank 2.6%, according to FactSet data. The iShares 10-20 Year Treasury Bond ETF
\n TLH
\n slumped 1.9%.<\/p>\n

\n

Ten-year Treasury yields jumped after Fed Chair Jerome Powell held a press conference Wednesday on the central bank\u2019s interest-rate-setting policy meeting, which ended with its summary of economic projections pointing to a potential rate hike later this year. Powell said at the briefing that the Fed\u2019s monetary policy needs to stay restrictive to tame still high inflation.\u00a0<\/p>\n

\u201cThe Fed once again alerted the financial markets that the federal funds rate will remain restrictively aloft for longer than generally expected,\u201d said Yardeni Research in a note Thursday.\u00a0<\/p>\n

Bond yields have skyrocketed since the Fed embarked in early 2022 on an aggressive campaign hiking its benchmark rate to bring surging inflation back down to its 2% target. The yield on the 10-year Treasury note
\n BX:TMUBMUSD10Y
\n climbed 13.3 basis points on Thursday to 4.479%, the highest since October 18, 2007 based on 3 p.m. Eastern Time levels, according Dow Jones Market Data.<\/p>\n

Treasurys with short-term maturities are faring better than long-term U.S. government bonds this year, including on Thursday.\u00a0<\/p>\n

For example, shares of the iShares 1-3 Year Treasury Bond ETF
\n SHY
\n ended in positive territory on Thursday, edging up around 0.1%, according to FactSet data. The fund has returned a total 1.4% this year through Thursday, outperforming the 6.9% loss posted by the iShares 20+ Year Treasury Bond ETF over the same period on a total return basis.<\/p>\n

Read:<\/strong> BlackRock launches series of TIPS ETFs as Fed battles inflation<\/p>\n

With the Fed fighting inflation this year with higher rates, ultra-short-term U.S. government debt has been attracting investors with yields of more than 5%. The yield on three-month Treasury bills
\n BX:TMUBMUSD03M
\n was trading at almost 5.5% on Thursday, FactSet data show, at last check.<\/p>\n

Shares of the iShares 0-3 Month Treasury Bond ETF
\n SGOV
\n closed Thursday up less than 0.1%, for a total return this year of 3.6%.<\/p>\n

Meanwhile, the jump in 10-year Treasury yields weighed on the U.S. stock market. The Dow Jones Industrial Average
\n DJIA
\n closed 1.1% lower Thursday, while the S&P 500
\n SPX
\n fell 1.6% and the Nasdaq Composite
\n COMP
\n dropped 1.8%, according to FactSet data. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Exchange-traded funds that invest in long-term Treasury bonds dropped Thursday, as yields continued their march higher in the wake of the Federal Reserve\u2019s meeting on monetary policy. Shares of the Vanguard Long-Term Treasury ETF VGLT finished with a sharp 2.3% drop, while the iShares 20+ Year Treasury Bond ETF TLT sank 2.6%, according to FactSet […]<\/p>\n","protected":false},"author":1,"featured_media":40710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-64340","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nETFs that buy long-term Treasury bonds drop sharply after Fed signals higher for longer rates | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Exchange-traded funds that invest in long-term Treasury bonds dropped Thursday, as yields continued their march higher in the wake of the Federal\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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