The BondBloxx Bloomberg Three Year Target Duration US Treasury ETF is experiencing significant price movement due to rising U.S. Treasury yields. On December 4, 2024, the yield on the 10-year Treasury increased by nearly three basis points to 4.2478%, while the 2-year Treasury yield rose by more than one basis point to 4.1814%. This rise in yields is driven by investor anticipation of upcoming labor data, including the ADP Employment Change report and the November jobs report, which are expected to provide insights into the U.S. labor market's strength. Additionally, Federal Reserve Chair Jerome Powell's upcoming speech is being closely monitored for potential clues on future interest rate policy, adding to the market's cautious sentiment.
The ETF's underlying assets, U.S. Treasuries, are directly impacted by these yield movements, as bond prices and yields move inversely. The market is also reacting to expectations of a potential interest rate cut by the Federal Reserve at its December meeting, with a 73.8% probability of a rate cut being priced in. This anticipation is based on recent economic data and forecasts suggesting a continued downward trend in inflation, although some Fed officials have expressed caution due to persistent inflationary pressures.
The BondBloxx Bloomberg Three Year Target Duration US Treasury ETF (XTRE) is down 8.09% in pre-market hours on Wednesday, December 4, falling to $45.01 as of 6:16 AM ET.