Investors are capitalizing on price dips in Treasury bonds as the month-end approaches, with a focus on extending out the curve. This strategy is driven by the muted advance in the Fed's favored inflation gauge for December, which has tempered inflation expectations and reduced pressure on yields. As a result, longer-duration Treasuries have become more attractive, offering higher yields to compensate for increased interest rate risk. The month-end theme, well-advertised and expected, is influencing trading patterns, particularly as some accounts wait until the last minute to execute their maneuvers.
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 into the dip, aligning with the broader market trend of extending duration in anticipation of stable inflation and supportive demand dynamics.