Why the Fed’s Latest Move Could Pressure Bonds Further
Long-duration bonds are approaching critical levels, with the iShares 20+ Year Treasury Bond ETF (TLT) nearing a technical retest area. The broader context involves not only higher yields, but also the expectation that policy may remain restrictive. These factors continue to pressure the bond market , and if the current levels hold, the recent rebound may ultimately prove to be temporary.
The iShares 20+ Year Treasury Bond ETF (TLT) is trading at ~$86.50 and trying to climb its way back up to the 50-EMA, currently sitting at just above it. That retest matters a lot for the bulls who think rates will come down. TLT has been below both its 50-EMA and 200-EMA since mid-March, after the Fed’s hawkish shift sent yields higher. Since the lows following that meeting, the 20-year has consolidated and recovered a bit, and the chart is now asking every long bond bull to answer: does the first retest of the 50-EMA hold as resistance, or does TLT finally punch back through and reclaim some of that ground?