Exchange traded funds (ETFs) that invest in U.S. Treasury bonds rallied Friday after the government reported consumer-price data that showed inflation didn’t rise as much as some analysts had expected in March.
The iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) was up nearly 1% in midday trading and the ETF has risen back above its 50-day moving average.
“The Fed has more breathing room,” Suvrat Prakash, an interest-rate strategist, told Dow Jones Newswires.
“The [inflation]report was a bit of relief for those who have been nervous about inflation,” said Prakash, adding that one month’s data isn’t a trend and that core CPI has been rising in recent months, according to the report.
Growing fears about Europe’s debt crisis also fueled buying of U.S. Treasury bonds in a safe-haven trade, MarketWatch reported.
ProShares UltraShort 20+ Year Treasury ETF (NYSEArca: TBT), an ETF that provides leveraged short exposure to bonds, was down nearly 2% and was among the most active ETFs Friday by share volume. PIMCO’s Bill Gross recently initiated a short position in U.S. debt, according to reports.
iShares Barclays 20+ Year Treasury
