Is TLT’s Multi-Year Price Low a Buying Opportunity?

Bond markets are flashing red again as yields have surged to multi-year highs, pushing down prices for fixed-income benchmarks like the iShares 20+ Year Treasury Bond ETF (TLT) to near all-time lows. 

TLT’s price traded below $85 for only the second time in nearly 18 years Wednesday after a weak Treasury auction added to worries over fiscal debt. 

Negative bond market sentiment has also risen amid renewed concerns about persistent inflation—driven in part by tariff-related cost pressures—and a growing lack of confidence in U.S. fiscal management, highlighted by the recent credit rating downgrade from Moody’s.  

As advisors and investors digest these developments, one key question emerges: Do today’s elevated yields and beaten-down prices represent a rare buying opportunity in long-term Treasurys? 

Bond Market Warning: Inflation, Tariffs, Fiscal Anxiety 

The bond market’s selloff is rooted in a deepening worry about long-term inflation and government solvency. While inflation has cooled since its post-pandemic peak, the bond market is showing little confidence that price pressures will fully normalize. A key reason: New and expanded tariffs are expected to raise input costs for businesses and consumer prices alike. These policy decisions—aimed at bolstering domestic industry—may also have the unintended consequence of extending the inflationary cycle. 

Adding fuel to the fire is the recent Moody’s downgrade of the U.S. credit outlook. While largely symbolic, the move reflects real concerns over America’s unsustainable fiscal path. Deficits remain elevated, and the political gridlock in Washington has undermined efforts at long-term debt reduction. For bond investors, this combination of inflation and fiscal indiscipline undermines confidence in future purchasing power and raises fears that rates will have to remain higher for longer to attract capital. 

As a result, long-duration Treasurys have suffered. The price of TLT, which holds bonds with maturities of 20 years or more, is down significantly year to date and trading near levels last seen during the peak of the rate-hiking cycle in 2022. 

TLT Price History Suggests Big Moves to Come

TLT’s price history suggests that the long bond market proxy may be headed toward a big price surge. The last two occasions when TLT dropped below $85, its price had large run-ups while the stock market saw starkly different results. 

October 2023: End of a Massive Bond Market Bear

TLT dropped to about $83 per share in October of 2023, ending one of the worst bear declines in bond market history as the Fed finally ended its fastest rate-hike campaign to fight the worst inflation in 40 years. After our analysis suggested TLT had reached a bottom, the long-term Treasury bond ETF climbed more than 20% over the following two months. 

The stock market, as measured by the SPDR S&P 500 ETF (SPY), would begin two consecutive years of 25% gains. 

July 2007: The Beginning of the Great Recession

TLT was trading just under $84 in July of 2007, as the financial crisis was beginning to unfold. Just one month prior, Bear Stearns, the first of the failed large banks and brokerage firms tied to subprime lending, had just pledged a collateralized loan to “bail out” one of its funds.  

The U.S. economy soon entered the worst recession and steepest bear market for stocks since the Great Depression. TLT rose more than 40% by December of 2008, whereas SPY fell 50% from its 2007 peak to its 2009 trough.

TLT's All-Time Lows and Highs

• TLT's all-time low since its July 2002 inception came in August of 2003, when the newly minted bond proxy hit $82 after the post-market crash risk-on sentiment and flight out of the perceived safety of Treasurys ensued. TLT would then rally about 15% from that low into 2004 as the bond market fretted about deflation. 
• TLT's all-time high of approximately $170 came in April of 2020, amid aggressive Fed rate cuts aimed at fighting the Covid-19 economic turmoil.

Why TLT Investors Are Buying the Dip

Despite the grim headlines, not all investors are heading for the exits. In fact, TLT has seen 10 consecutive days of inflows, totaling $3.5 billion according to FactSet data, suggesting that some advisors and institutions are starting to see value in long-term government debt. 

TLT Fund Flows—Source: FactSet data

The thesis for TLT investors is straightforward: While rates may be elevated now, history suggests that bond yields typically fall—and prices rise—when the economy begins to slow or the Fed pivots to easing. 

With the U.S. economy showing signs of strain in consumer sentiment and corporate earnings, some believe a slowdown later in 2025 is likely.  

In that case, long-term bonds purchased at today’s high yields could deliver strong total returns both through interest payments and price appreciation. For income-oriented investors and those looking to hedge against equity volatility, the entry point in long-dated Treasurys is starting to look attractive again. 

Moreover, the longer the duration, the more price-sensitive bonds are to changes in rates. That makes ETFs like TLT particularly potent instruments for rate speculators or those seeking convexity in balanced portfolios. 

TLT: Risks and Rewards in Today’s Bond Market

The current bond environment presents a challenge—and an opportunity—for advisors and investors. On one hand, persistent inflation, political dysfunction and fiscal stress may keep yields elevated for longer, weighing on bond prices.  

In contrast, a slowing economy or a Fed policy shift could trigger a rally in fixed income, especially in long-duration Treasurys like those tracked by TLT. 

For now, the bond market is caught in a tug-of-war between inflation fears and recession signals. Navigating this landscape requires a balanced approach: understanding the macroeconomic backdrop, monitoring policy shifts, and assessing client-specific risk tolerance and income needs. 

Ultimately, while the pain in bonds has been sharp, the higher yields on offer today could reward patient, strategic investors in the months ahead—especially those willing to look past the headlines and toward the intermediate to long term.