Taps Coogan – April 27th, 2022

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The popular iShare 20+ year treasury ETF has seen its biggest drawdown ever, as the following chart from The Daily Shot via Isabelnet highlights.

As we recently noted, treasuries have seen their worst 12-month total-return on record and that’s before taking ‘real’ losses (inflation) into account.

It’s hardly a surprise that people who lent money at deeply negative real rates over the last year while inflation was surging, GDP was running hot, and the Fed was still doing QE are taking big losses. The more interesting question is whether the current ‘spike’ in yields, against the backdrop a potential roll-over in inflation, presents an opportunity to lock in slightly less-terrible yields before an eventual recession.

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