TMF ETF

With the path to rate cuts clearer, Treasury bonds have been heading higher since the start of the summer, but they've taken a turn. The return of rising yields have been putting the Direxion Daily 20+ Yr Trsy Bear 3X ETF (TMV) and the Direxion Daily 7-10 Year Treasury Bear 3X Shares (TYO) back into positive territory.

TMF, with its 3x leverage, is the most volatile and performs best for short-term trades, despite its risks over long-term holding. The recent yield curve shifts and increased volatility could present a good trading opportunity, making TMF an attractive choice for short-term positions. Given the structure of the TMF ETF, effective risk management is crucial; consider integrating strategies to mitigate potential capital losses, and avoid including it in a long-term portfolio.

As the U.S. Federal Reserve starts to ease monetary policy, the yield curve is starting to steepen after a couple of years inverted. In turn, this is pushing a pair of leveraged exchange traded funds (ETFs) from Direxion higher.

The Federal Reserve's 50 basis point rate cut led to a sell-off in Treasuries, creating a short-term buying opportunity for investors. TMF offers 3x leveraged exposure to long-term Treasuries, which should benefit from anticipated further rate cuts in 2024 and 2025. Despite risks like interest rate and duration risk, TMF is positioned to perform well in the near term due to expected rate declines.

Recent market conditions have sparked interest in long-term Treasury bonds due to probable rate cuts by the Federal Reserve. Treasuries provide steady income, a hedge against stock market drops, and offer safety backed by the U.S. government. The Direxion Daily 20+ Year Treasury Bear 3X Shares ETF (TMF) may see gains as Treasuries appreciate with probable rate cuts and possible market uncertainties.

Yields on 10-year U.S. Treasuries have trended lower lately with bond markets pricing in a Federal Reserve rate cut as early as September. Aside from the usual Fed speculation, add in some extra uncertainty for the U.S. presidential election and interest rate traders may see some action in coming weeks and months.

Signs of cooling inflation are bringing bond bulls back as the Federal Reserve recently kept interest rates unchanged yet again. Bond bulls, however, are betting on rate cuts propping up prices as the second half of 2024 may see the first of said cuts.

A bond rally could be in the works as incoming economic data could hint at a cooling economy. That could bring the 2% target inflation rate closer for the Federal Reserve.

More fund managers are starting to add bonds to their portfolios again. That's evidenced by allocations in the last few months.