The latest jobs report, revealing a robust addition of 256,000 jobs in December and a drop in the unemployment rate to 4.1%, has reinforced expectations of sustained economic growth. This has led to increased speculation about potential interest rate hikes by the Federal Reserve. As a result, bond buyers are becoming more cautious, with many opting to stay on the sidelines. The anticipation of higher interest rates is driving bond yields upward, reflecting investors' demand for greater returns amid expectations of prolonged inflation pressures or continued economic strength.
The iShares 20+ Year Treasury Bond ETF (TLT), which focuses on long-term U.S. Treasury bonds, is experiencing downward pressure as rising yields make existing bonds less attractive. The ETF is currently trading at $85.17 as of 09:32 on January 10, marking a new 52-week low. This movement aligns with the broader trend of bearish momentum in the bond market, as investors adjust their portfolios in response to the evolving economic landscape.