Thursday, August 3, 2023

"Billionaire investor Ackman says he is shorting 30-year Treasuries"

Here's the three-month chart (daily prints) of the futures via Finviz (also on blogroll at right):

And from Reuters via Yahoo Finance, August 2:

Billionaire investor William Ackman on Wednesday said his hedge fund Pershing Square Capital Management has placed a bet against U.S. 30-year Treasuries, calling it both a hedge on the impact of higher long-term rates on stocks and a good standalone bet.

"We are short in size the 30-year T," Ackman wrote on messaging platform X, formerly known as Twitter. He argued that if long-term inflation is 3% not 2%, the 30-year Treasury yield could rise to 5.5%, adding "and it can happen soon." On Wednesday, the yield on the 30-year Treasurys climbed to 4.16%, the highest close of the year.

"We implement these hedges by purchasing options rather than shorting bonds outright," Ackman wrote.

Ackman said higher defense costs, energy transition and the greater bargaining power of workers all point toward higher inflation. The Federal Reserve has raised interest rates aggressively to curb inflation and signaled last month that it is keeping its options open after having raised rates by a quarter point to their highest level since 2001....


Related, August 1: The Chart That Implied Longer-Term Interest Rates Were Going Higher

And:  Interest Rates: "US Government Debt Spikes by $1.2 trillion since Debt Ceiling, to $32.7 Trillion. Treasury to Add $1.5 Trillion in Debt by Year-End"