Fed Minutes Fail to Halt Bond Rally as Treasury Doubles Buybacks
TLT is trading near its 52-week low of $81.17 (2.1% above the low).
Summary
The Fed minutes released Wednesday afternoon were less hawkish than feared, with only three officials voting for a hike and most expecting inflation to decline. Combined with the Treasury's announcement to double long-dated bond buybacks to at least $4 billion per operation, long-term yields fell sharply. TLT rallied 1.35% to $82.78, recovering from its 52-week low set earlier this week. The 30-year yield dropped nearly 10 basis points to 5.20%, and the dollar weakened while gold jumped 3.2%. This follows a week of heavy selling in long-duration bonds, with TLT hitting its lowest level since 2004 on Friday. The market is now pricing only a 35% chance of a September rate hike, down from earlier expectations. Watch the September FOMC meeting for confirmation of the Fed's path.
At the time of this announcement, TLT was trading at $82.90 on NASDAQ in the Finance sector. The 52-week trading range was $81.17 to $92.19. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: Benzinga.