VCLT - TLT: 4 Reasons To Remain Bullish
2024-06-18 09:32:59 ET
Summary
- TLT may face near-term volatility due to inflation and economic data, but long-term trajectory could be impacted by treasuries issuance and demand.
- Inflation is slowing down, with the Fed conservatively projecting only one rate cut in 2024 if inflation continues trending towards 2%.
- Recent economic data shows potential weakening, with job numbers and consumer sentiment softening, which could benefit TLT in a hard landing scenario.
- The average lag between the first yield curve inversion and a recession range from 6 to 24 months (now 21 months), often coinciding with the peak of the equity market.
- If AI-driven growth doesn't strongly boost long-term U.S. economic expansion, these companies might struggle with growth in 2025. If there's a severe equity market selloff from earnings slowing next year, TLT could benefit.