The Direxion Daily 20-Yr Treasury Bull 3x ETF (TMF) is experiencing upward momentum, driven by recent developments in the U.S. Treasury market. On February 5, 2025, the U.S. Treasury's re-funding announcement, led by the new Treasury Secretary Scott Bessent, is a focal point for investors. While no surprises are expected, the market remains cautious, with any unexpected moves potentially impacting Treasury yields. Additionally, the Federal Reserve's recent rate cuts have not led to a decline in long-term rates, contrary to typical market behavior. This has resulted in an un-inverted yield curve, which is seen as a positive sign for bank lending and economic activity.
Moreover, the unusual path of interest rates, with long-term yields rising despite the Fed's rate-cutting cycle, has caught the attention of investors. This rise in yields is attributed to expectations of fewer future Fed rate cuts and strong economic data, including a stable unemployment rate and solid GDP growth. The 10-year Treasury yield, for instance, has increased significantly since mid-September 2024, reflecting these market dynamics. This environment has created opportunities for investors to consider moderate-duration exposure, further supporting the TMF ETF's performance.
The TMF ETF rose to $42.90, marking a 3.89% increase from the previous close.