What Comes Next For Bond ETFs After Yields Soar?

What Comes Next For Bond ETFs After Yields Soar?

Last week was one of the worst in the past few years for bond prices, sending two benchmark short- and long-dated bond ETFs to one of their best weeks for inflows in recent memory.

The yield on five-year Treasury bills rose nearly 15% last week, with the 10- and 30-year yield rising 10.7% and 4%, respectively. Those three increases bring yields to levels not seen since the spring of 2019, when the federal funds rate was at 2.4%.

Those moves have sent money to the extreme ends of the maturity curve, with the iShares 20+ Year Treasury Bond ETF (TLT) adding more than $2.6 billion and the iShares Short Treasury Bond ETF (SHV) more than $1 billion last week to top the inflows leaderboard for U.S.-listed ETFs.