The exchange traded fund tracks investment results of an index made up of U.S. treasury bonds with remaining maturities greater than 20 years.
Is the bond market rally coming to an end? We're not sure if that is true, after all, for years we have heard "the end is nigh," yet that has never materialized.
Bond investors and traders hate one thing and one thing only: inflation.
For the 35 year bull market in bonds, inflation has been contained to only modest blips on the screen, and the Fed has used monetary policy as a tool to tame inflation. The bond market is far bigger than the equity market, and even a ripple is felt by everyone.
Price action matters most, and for years the long term trend of price has been up, while yields have been trending down.
Recently, bonds have sold off sharply with yields rising since the end of April, but the first shock happened after the ten-year bond touched down near 1.6%. At the time, everyone seemed in a panic. The economy was so bad that the best investment was a bond.