Treasury ETFs Just Posted One Of Their Deepest Weekly Outflows Since 2005
Key Insights
- US Treasury news shows ETFs recorded one of their deepest weekly outflows on record, relative to net asset value, as bond yields climbed.
- Rising yields and geopolitical tensions are intensifying bond-market pressure, potentially creating a feedback loop of ETF redemptions and further Treasury selling.
- The U.S. Treasury plans at least $16.5B in debt buybacks next week, offering a potential liquidity counterweight to heavy private-sector selling.
US Treasury news turned increasingly volatile as Treasury-focused ETFs suffered unusually large weekly redemptions while benchmark government-bond yields moved toward multi-year highs.
Bloomberg data shared by Barchart showed Treasury ETF net outflows ranking among the deepest weekly withdrawals relative to net asset value since 2005. The move coincided with renewed selling across global government bonds and a rise in the benchmark 10-year Treasury yield toward 4.8%.
Pressure intensified after stronger-than-expected U.S. employment data increased expectations that the Federal Reserve could raise rates in September. Renewed U.S.-Iran hostilities also lifted oil prices, adding another inflation risk for fixed-income markets.
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