The iShares 20+ Year Treasury Bond ETF (TLT) has sold off this year, even as investors have continued to invest in the fund. TLT dropped to $80 on Monday, its lowest level since July 2025, and nearly 9% from its highest level this year.
TLT ETF is seeing inflows despite rising bond yields
The iShares 20+ Year Treasury Bond ETF has come under pressure this year as US bond yields continue rising. Data shows that the ten-year yield rose to 5.023%, its highest level since 2007, and much higher than the year-to-date low of 3.92%. It has been in a steady increase since bottoming at 0.33% during the pandemic.
The 30-year yield has also continued rising this year and is trading at 5.383%, its highest level since 2004. Like the 10-year, it has risen sharply from the pandemic low of 0.725%.
Despite the rising yields, there are signs that investors are investing in the TLT ETF, which tracks longer-dated government bonds. Its inflows have jumped by nearly $10 billion in the last three months and by $3.75 billion in the last 30 days. These inflows have brought its assets under management (AUM) to over $47 billion.
US bond yields are rising ahead of FOMC decision
These developments are happening as concerns about the US economy remains and as investors wait for the upcoming Federal Reserve interest rate decision. Data shows that the US public debt has jumped to over $40.1 trillion, and the surge will continue since President Donald Trump and Congress are not focused on reducing the deficit. The US debt-GDP ratio has jumped to 122%.
Many analysts warn that the current phase of spending is not sustainable. The US is collecting over $5 trillion in tax revenue a year and spending over $7 trillion. This spending will likely continue if Trump’s goal for having a defense spending of $1.5 trillion becomes real.
In most cases, a surging debt is not a bad thing, especially when it is accompanied by a strong economic growth. The challenge, however, is that the US economy is not growing as fast. Indeed, stripping the large AI investments shows that the economy is no longer growing.
The economy is also contending with other major risks. For example, the price of crude oil has jumped this week as the US-Iran crisis continues. Brent jumped to $107, while the West Texas Intermediate (WTI) rose to $102. Oil prices will likely continue rising as the crisis in the Middle East escalates.
TLT ETF technical analysis
TLT chart | Source: TradingView
The daily chart shows that the TLT ETF has been in a strong downward trend in the past few months. It has now slipped below the important support level of $80.93, its lowest level on August 18.
The fund has remained below all moving averages, a sign that bears are in control for now. It has also remained below the Supertrend indicator. Also, the Relative Strength Index (RSI) has drifted downwards to the current 37.
Therefore, technicals suggest that the ETF will continue falling in the near term. If this happens, the next key level to watch will be at $79.9, its lowest level on July 16 last year.
The post TLT ETF slumps, inflows jump as US Treasury yields soar appeared first on Invezz
