Rising Treasury yields are exerting pressure on the iShares 20+ Year Treasury Bond ETF (TLT) as investors anticipate the Federal Reserve's monetary policy decision. On January 28, 2025, bond yields climbed, with the 30-year Treasury yield increasing by 3 basis points to 4.805%. This rise in yields is attributed to a reduction in demand for safe-haven assets amid calmer global market conditions and expectations that the Fed will maintain its current interest rate range of 4.25% to 4.50%. Additionally, reports of potential increases in U.S. import tariffs are fueling inflation concerns, further lifting yields.
The Federal Reserve's expected pause in rate cuts, driven by rising inflation and economic data, is also contributing to the upward pressure on yields. With a 99.5% probability of maintaining current rates, the Fed's cautious stance is reminiscent of the 1970s stagflation era. This has led to a sharp correction in long-duration Treasury bonds, as reflected in the TLT ETF. Investors are closely monitoring the Fed's decision, which could introduce volatility if a hawkish pause is delivered.
The iShares 20+ Year Treasury Bond ETF (TLT) is trading at $87.97, down 0.32% from the previous close.