What happens in the short-term is just noise. This is a generational income opportunity.
What happens in the short-term is just noise.
This is a generational income opportunity.
The 10-year Treasury yield is up more than 100 basis points in 2026, including a 50-basis-point increase just since the beginning of September.
That's lifted long-term Treasury bond yields to levels not seen in nearly a quarter-century. As a result, the iShares 20+ Year Treasury Bond ETF (TLT +0.19%) is down another 8% year to date and still sits 45% below its 2020 high.
Even though it's easy to focus on the damage, here's what I think a lot of investors are missing right now. The yields that have created so many losses over the past few years are also creating opportunities for bond investors today.
Current Treasury yields are offering the highest income levels in two decades. And if the Iran war ends, inflation comes down, or the economy slows, those yields are very likely going to come down. This creates a near-term opportunity to capture 10%-plus share price gains on top of 5% yields.
Why the bond market is so volatile
Several factors are pushing Treasury yields higher.
Rising oil prices get most of the blame, and rightfully so. Brent crude prices have soared since the start of the Iran war -- and at $110 a barrel, they're more than high enough to crush consumer demand if they stay there.
Even though oil prices have shown signs of peaking over the past month, the Bureau of Labor Statistics reported a 0.4% month-over-month increase in the overall inflation rate in August. Rising price pressures aren't nearly over.
Averytin News Financial update.