Treasury Bond Massacre, Mortgage Rates Hit 5.35%, Highest since 2009, and it’s Only April | Wolf Street

When yields rise, it means prices of those bonds fall, and prices fall the hardest of bonds with the longest remaining maturities.

And it’s a massacre for people who invested in what they thought was a very conservative and prudent instrument, namely a bond fund tracking long-term Treasury securities, when in fact it turned out to be a highly risky wager on long-term Treasury yields always going lower forevermore.

The iShares 20+ Year Treasury Bond ETF [TLT], which tracks an index of Treasury securities with at least 20 years of remaining maturities, dropped another 0.75% today, is down 19.5% year-to-date, and has plunged by 30.6% from the peak in August 2020, which was when long-term Treasury yields had hit historic lows, and which was – with hindsight – the moment the greatest bond-market bubble in US history began to implode:

Treasury Bond Massacre, Mortgage Rates Hit 5.35%, Highest since 2009, and it’s Only April | Wolf Street