US Treasuries May Take Hit: Time to Go Short on TLT?
The U.S. 10-year Treasury yield briefly rose to 4.5% today, and TLT may face greater risks in the near term. China holds over $700 billion in U.S. Treasuries, and in an extreme scenario, if it decides to retaliate against the U.S. by dumping bonds on the market, short-term yields could come under significant upward pressure. While the Fed could step in and print money to buy, the room for yields to fall may be limited before this risk is fully priced in. Are you still holding U.S. Treasuries? What’s your trading strategy?
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