The iShares 20+ Year Treasury Bond ETF (TLT) has now been in a drawdown for 2,205 calendar days, or just over six years, since its August 4, 2020 peak. The decline ranks among the most prolonged and severe bear markets ever experienced in long-duration U.S. Treasury bonds. What makes this episode particularly notable is that Treasuries are traditionally viewed as a defensive asset class, yet investors endured equity-like losses as the sharpest interest-rate normalization in decades drove bond prices lower. The persistence of the drawdown highlights the extraordinary duration risk embedded in long-term bonds and underscores how the post-pandemic inflation and rate cycle fundamentally altered the risk profile of assets that many investors historically considered “safe.”
More than six years removed from its peak, TLT’s inability to recover previous highs serves as a stark reminder that “safe” and “risk-free” are not synonymous. While U.S. Treasuries remain among the highest quality credit instruments in the world, they can experience deep and prolonged declines when inflation, growth expectations, and monetary policy move against investors.
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