Hedge fund investor Bill Ackman said Thursday that he still thinks long-term Treasury yields will continue to rise, potentially to levels not seen since before the great financial crisis. Ackman said Thursday night on X that he is betting against long-term bonds through the ownership of swaptions. The 30-year Treasury yield was trading at 4.575% on Friday morning after hitting its highest level since 2011 on Thursday. Yields move opposite of price. US30Y YTD mountain The 30-year Treasury yield hit a new high for the year on Thursday. Ackman said that he did not believe the Federal Reserve could get inflation back down to its 2% target due to a resurgent labor movement and high energy prices, among other reasons. He also pointed to the government deficit and a pullback of Treasury demand by foreign buyers as a reason market prices for bonds will fall. “The world is a structurally different place than it was. The peace dividend is no more. The long-term deflationary effects of outsourcing production to China are no more. Workers and unions’ bargaining power continues to rise. Strikes abound, with more likely to come as successful walkouts achieve substantial wage gains,” Ackman said. Ackman said he thinks 5.5% could be more the rational yield for the 30-year Treasury. The 30-year has not consistently traded above 5% since 2007. “When investors saw the ‘opportunity’ to lock in 4% for 30 years, they grabbed it as a ‘once-in-their-career opportunity,’ but today’s world is very different from the one they have experienced up until now,” Ackman said. There are several ETFs that would allow investors to mimic Ackman’s bet. The largest inverse bond ETF is the ProShares UltraShort 20+ Year Treasury ETF (TBT) , according to VettaFi. The fund aims to return two-times the inverse of the daily move of the ICE U.S. Treasury 20+ Year Bond Index. Investors should be aware that the daily nature of the fund means that the ETF’s performance won’t perfectly be two-times inverse the index over time. ProShares also has the Short 20+ Year Treasury ETF (TBF) , which is a one-times inverse fund. To be sure, Ackman did include one caveat at the bottom of his post. “But I could be wrong. AI might save us,” he said. Pershing Square Capital Management Founder and CEO Bill Ackman will be speaking at the CNBC Delivering Alpha summit on Sept. 28.
