Samlunch
06-07

$iShares 20+ Year Treasury Bond ETF(TLT)$ 

Will elevated interest rates trigger a recession in the US?

Real rates, which are rates adjusted for inflation, have risen to 2.5%, the highest since the 2008 Financial Crisis.

In just 2 years, they have increased by 8 percentage points since the -5.5% low.

Over the last 40 years, such high real rates have typically occurred prior to a recession.

Meanwhile, the market is pricing just 1 rate cut in 2024, down from 7 forecasted in January.

"Higher for longer" is weighing on the economy.

TLT Return to $100 Amid Rate Cut Expectations?
On June 5, the Bank of Canada cut the overnight rate by 0.25%, lowering the base rate from 5% to 4.75% for the first time in four years. This rate cut has led the market to expect that the European Central Bank and the Federal Reserve will also cut rates. US Treasury bond ETFs TLT and TMF have risen by 3% and 10% this week. ------------------- Is now a good time to buy TLT? Which other stocks would benefit from rate cuts?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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