Where TLT Will Go When The FED Raises Rates: It's Not What You Think

Summary

  1. In the last four FED tightening cycles, the interest rate on 30-year Treasurys hasn’t risen much, if at all.
  2. Long-dated Treasury yields usually converge as the Fed tightens and the 30-year yield is still more than 1% above the 5-year yield.
  3. Don’t be afraid to hold Treasurys in the face of rising short-term rates. They provide excellent diversification to an equity portfolio.