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Leaders’ guidance on bank expectations lifts focus on a leveraged bond ETF

The article ties the ETF’s near-term appeal to a possible pullback in 10-year Treasury yields, after yields moved above 5% for the first time since 2007.

Reported · Written up by our desk · ETFs

Fresh services and manufacturing data cited by ETF Trends renewed concern that the Federal Reserve may need to raise interest rates again before the end of the year, a shift that pushed 10-year Treasury yields above 5% for the first time since 2007.

ETF Trends also links the volatility to a recent Fed move, noting the central bank’s 25 basis point rate hike and its aim to cool inflation using blunt policy tools.

Against that backdrop, the piece highlights Direxion’s leveraged fixed income product, the Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD), which seeks daily returns equal to 300% of the ICE U.S. Treasury 7-10 Year Bond Index.

While the outlet cautions that no leveraged ETF, including TYD, should be held for weeks or months, it says tactical traders may watch the fund if Treasury yields retreat, citing big banks’ expectations that lower yields could be ahead.

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