Treasury bonds are experiencing a rally as fears surrounding potential inflationary pressures from President Trump's policies have eased. The absence of immediate sweeping tariffs has reduced the inflation threat, leading to a decline in U.S. 10-year yields by 8 basis points to 4.55%. This has provided a boost to Treasuries, which had been oversold, setting the stage for further gains. The market is also reacting to the delay in any trade-related tariff announcements, which is giving Treasuries a reprieve and contributing to the rally. Additionally, the Federal Reserve's recent decision to cut the federal funds rate by 25 basis points to a range of 4.25%-4.5% has further supported the bond market, as investors anticipate a slower pace of rate cuts in 2025.
The iShares 20+ Year Treasury Bond ETF (TLT) rose to $87.72, marking a 0.61% increase as of 10:00 AM ET on January 21st.