Investors are capitalizing on price dips in the Treasury market as month-end rebalancing activities intensify. The focus is on extending out the curve, with increased demand for longer-duration Treasuries. This strategic shift is driven by muted inflation data, which suggests stable interest rate expectations, making longer-duration Treasuries more attractive to yield-seeking investors. The anticipation of month-end buying has been well advertised, with some accounts waiting until the last minute to execute their maneuvers, countering earlier steepening moves in the yield curve.
The iShares 20+ Year Treasury Bond ETF (TLT), which tracks long-term U.S. Treasury bonds, is currently trading at $88.54 as of 10:02 on January 31. This reflects a slight increase from its last close of $88.34, as investors continue to buy on dips, stabilizing prices amid fluctuating demand.