Wednesday, July 29, 2009

Yields Up

We can expect more articles like this in the next few months. Record Treasury supply is driving down bond prices:

Treasury five-year notes fell as the government sold a record $39 billion of the ecurities, the third of four auctions totaling $115 billion that is the largest amount of so-called coupon securities sold in a single week.


Lower bond prices mean higher yields. It's as simple as that. My reaction? Short bets on ETFs like TLT look increasingly attractive.