iShares 10-20 Year Treasury Bond ETFNYSE American: TLH

Inflation and interest rates are remaining high. Inflation is not really going down, and inflation expectations are going to make the figure resistant to decline. We aren't even seeing unemployment kick in to pressure inflation rates given current rates.

The TLH is a duration bet that may not be favorable in the current interest rate environment. We believe higher rates will be needed in 2024 and even 2025, in order to impact inflation through the corporate channel. The impact of higher rates on consumers has been limited, but businesses and corporate earnings will drive recessionary pressures more through restructuring efforts and lower employment.

Long-term bonds look appealing to Wells Fargo Investment Institute after they were hurt by a surge in yields.

Shares of exchange-traded funds that buy U.S. Treasury bonds with long-term maturities fell Monday, after three straight weeks of declines, as Goldman Sachs Group analysts forecast the Federal Reserve may cut interest rates next year.

TLH is a long-duration bet in a risky environment for long-duration plays. Long-term rates are in flux, and it concerns how difficult the last leg of inflation will be to achieve. Signs like last year's inflation expectations for 2024 point to this being the limit of what easy lapping of data and supply chain resolutions will fix.

TLH holds treasury bonds in the 10-20 year range. For leaving the safety of shorter-term yields, you get the double penalty of lower yields and higher risk.