Leveraged Treasury Bull ETF Gains Following Rate Decision

Related: Lessons From How Pros Use Bond ETFs

TMF seeks daily investment results worth 300% of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. The fund invests at least 80% of its net assets in securities of the index and ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than 20 years.

Fed Chair Sees Moderating Growth

Following the decision, Federal Reserve Chairman Jerome Powell communicated that the central bank sees “growth moderating ahead.”

The markets have certainly taken a turn for the worst since September’s rate hike, and the Fed Chair did indeed recognize the change. Rather than completely ignore the latest market oscillations, Powell took these factors into account at the post-rate-hike presser, saying that “cross currents have emerged” and “financial market volatility” has increased.

In fact, Powell acknowledged the global growth concerns that have been reverberating through the capital markets. With the trade war between the United States and China ongoing despite the latest tariff ceasefire, global economies are beginning to show signs of retreating.

“Growth in the economies have moderated around the world,” said Powell, as Europe and China recently released weaker economic data.

As concerns in the markets continue to mount, a flight to long-term Treasuries could see TMF continue to benefit.

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