A Bond Selloff Is Rocking the World. You Might Want to Take the ...

Whereas a leveraged inverse bond ETF (one that is designed to go up if bonds go down) can only be held for short periods of time because it bleeds value, a short position in a leveraged long bond ETF (a fund designed to go down if bonds go down) can be held for years because its gradual loss of value works to the short seller’s advantage. So to bet

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The 10-year yield serves as a bellwether for the broader economy. When it fluctuates sharply, it signals investor uncertainty about future growth, inflation, or interest rates — all factors that influence everyday financial decisions.

The only difference might be that the yields on U.S. government bonds will be higher by a tiny amount while credit spreads on risky assets would be lower by the same amount. This will be because there is an increase in the willingness of the market to hold risk assets relative to riskless assets, and the corresponding price of both types of assets

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The bond market has historically been known as “smart money”, in contrast to equity markets that are more of a mix of smart money and so-called dumb money.

This is because the bond market is generally characterized by professional investors and traders, whereas the equity market is a mix of all sorts of different investors and traders, including man

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