Treasury Performance After 2000 Election (NASDAQ:TLT

published 29.09.2020 16:21


The Long Treasury Index referenced in this article lost more than 6% over the next week as equity markets soared and investors priced in the prospect of faster economic growth under Trump.

The Bloomberg Barclays Long Treasury Index, which has a current yield of 1.28% and a duration of 19.5 years would need to push back under 1% to generate the level of return that was seen during the post-election Treasury rally in 2000.

In a comparison of the Bloomberg Barclays U.S. Long Treasury Index (TLT) and the S&P 500 in the graph below, Treasury securities rallied during this eight week period of political uncertainty.

While the U.S. Treasury market tends to be a safe haven amidst market volatility, this article recounts whether Treasury bonds responded favorably to market uncertainty emanating directly from the U.S. government that guarantees that debt.

In yesterday's article, How Stocks Did After the 2000 Election, I described the performance of various equity markets in the weeks-long uncertainty that followed the close and contentious 2000 election.