US Markets
Monday, October 23rd, 2023 2:16 pm EDT
Key Points
- Bill Ackman’s Successful Bet: Bill Ackman, a billionaire hedge fund manager, revealed his bearish position on 30-year Treasury bonds in August, anticipating higher yields due to long-term inflation. His bet has proved profitable, with the 30-year Treasury yield increasing by over 80 basis points since August. Bond prices and yields move inversely.
- Surge in Bond Yields: Recently, bond yields, particularly the benchmark 10-year rate, have seen a significant surge, surpassing the crucial 5% threshold. This surge is a response to the Federal Reserve’s indication that it intends to maintain higher benchmark interest rates for a more extended period to combat inflation.
Billionaire hedge fund manager Bill Ackman’s bearish stance on 30-year Treasury bonds, initially disclosed in August, is proving profitable as long-term yields have surged. Ackman’s position was based on his belief in higher long-term inflation, and since then, the 30-year Treasury yield has increased by more than 80 basis points, aligning with Ackman’s expectations. This success stems from the inverse relationship between bond prices and yields. Furthermore, recent bond yield spikes have been driven by the Federal Reserve’s commitment to maintaining higher benchmark rates for an extended period to combat inflation.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/23/bill-ackman-covers-bet-against-treasurys-says-too-much-risk-in-the-world-to-bet-against-bonds.html
