Bond ETF (TLT) In Focus As Fed Rate Hike Odds Plunge

From Tyler Durden: While a June rate-hike is baked in the cake no matter how badly the economic data that The Fed is “dependent” upon collapses, it appears traders are losing faith in the rest of the year as the odds of a hike occuring in December is now above that of September (as both drop to around 25%).

As economic data has crashed since The Fed hiked rates in March, so the markets expectations has dropped to just 1.44 rate-hikes this year (one in June guaranteed), well below The Fed’s guidance of 2 more rate-hikes minimum…

But perhaps more notable is the shift in timing as September odds tumble and December moves ahead…

And Eurodollar options traders are increasingly positioning for The Fed to disappoint…

But banks don’t care.

The bond market continues to rally in the face of lower rate hike odds, with the iShares Barclays 20+ Year Treasury Bond ETF (NASDAQ:TLT) was unchanged in premarket trading Thursday. Year-to-date, TLT has gained 4.86%, versus a 9.01% rise in the benchmark S&P 500 index during the same period.

TLT currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #19 of 27 ETFs in the Government Bonds ETFs category.


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