2024-04-24 11:41:00 ET
Summary
- The iShares 20+ Year Treasury Bond ETF should benefit as deteriorating US government finances forces the Fed to cap yields, similarly as the Bank of Japan.
- After Japan's debt to GDP ratio hit current US levels in 2002, long-term bonds saw returns of 4% in real terms.
- Changes in real yields tend to be a much stronger driver of long-term bonds than changes in inflation expectations.
- A dollar crash poses the main risk to returns, but for now, the strong dollar is a bullish sign for bonds and the TLT.
...
Read the full article on Seeking Alpha
For further details see:
TLT: Why Surging U.S. Debt Levels Are Bullish For Bonds