The Direxion Daily 20-Yr Treasury Bull 3x ETF (TMF) is experiencing downward pressure due to several factors impacting the U.S. Treasury market. On January 23, 2025, the U.S. Treasury auctioned $13 billion in 20-year bonds, which saw strong demand, particularly from indirect participants. The auction's cut-off yield was 4.90%, slightly below the when-issued yield, indicating robust interest. Despite this, the long-end U.S. Treasuries have been under pressure, with yields rising as the market anticipates potential inflationary pressures and a growing U.S. federal budget deficit. The bond market remains cautious, with concerns about sticky inflation and potential tariff increases under President Trump's administration, which could further impact inflation expectations.
Additionally, the 10-year Treasury yield has been on an upward trajectory, trading at 4.62% as of January 22, 2025. This rise in yields reflects market sentiment that inflation may persist above the Federal Reserve's target, compounded by the U.S. government's budgetary challenges. The Congressional Budget Office's projections of a widening deficit add to the uncertainty, as investors weigh the implications for future interest rates. The bond market's focus on these macroeconomic factors has contributed to the volatility in Treasury yields, affecting ETFs like TMF that are sensitive to long-term interest rate movements.
The TMF ETF fell to $38.83, down 2.57% as of 10:00 AM ET on January 23, 2025.