The Direxion Daily 20-Yr Treasury Bull 3x ETF (TMF) is experiencing price movement influenced by several factors in the bond market. Treasury yields have been volatile, with the 10-year U.S. Treasury yield easing to 4.68% on January 9, 2025, after a five-session rally that pushed it to 4.73%, its highest level since October 2023. This fluctuation is driven by concerns over inflation, potential tariff increases under the incoming Trump administration, and a hawkish Federal Reserve stance. The minutes from the FOMC's December meeting revealed that Fed officials see heightened upside risks to inflation, signaling a slower pace of rate cuts moving forward. Additionally, the bond market is set to close early today in observance of a national day of mourning for former President Jimmy Carter, which may also contribute to the current market dynamics.
The broader macroeconomic environment is also impacting Treasury yields. Recent business surveys suggest that companies are beginning to invest and hire following a clean election outcome, but risks remain from President-elect Trump's policy proposals, including significant immigration controls and trade tariffs. These factors are expected to push borrowing costs higher, with the US 10-year yield potentially breaking above 5% due to concerns about the government's fiscal position and debt sustainability. Meanwhile, global markets are mixed, with European bond yields climbing, adding to the pressure on U.S. bonds. However, U.S. Treasury yields have shown resilience, drifting lower despite these global pressures, as noted by BMO Capital Markets.
The TMF ETF is currently priced at $37.94, reflecting a slight decrease of 0.11% from the previous close.