TLT: Buy the Dip vs. Sell the Rip

TLT: Buy the Dip vs. Sell the Rip

Jobs report heated up debate between softer and harder economic landings.

Research Lead
Reviewed by: Staff
Edited by: James Rubin

Is the U.S. economy headed for a hard or soft landing?  

Bond investors seemed undecided Friday as December’s nonfarm payroll report presented mixed data. 

The iShares 20+ Year Treasury Bond ETF (TLT), the market proxy for rate-sensitive long-term bonds, declined by more than 1.0% to begin Friday trading, but then reversed course by 1.5% to get back into the green in less than one hour. By midday, shares had returned to the red. 

December's job numbers revealed that employers added 216,000 jobs, exceeding the 170,000 consensus estimates and suggesting that the economy was not done growing at a strong clip. The Labor Department report offered support for observers of U.S. monetary policy who believe the Federal Reserve must ratchet back its hawkishness more gradually. The unemployment rate remains at 3.7%.  

But the report also showed a combined 71,000 in downward revisions from October and November and an unchanged unemployment rate at 3.7%. 

Still, bullish investors who dug deeper into the report, decided it wasn’t so hawkish, after all, and bought the dip. 

After TLT’s morning recovery, investors who haven’t already cashed in their large 2023 price gains sold the Friday morning rip amid fears that a nervous Fed would keep interest rates higher for longer than bond investors have been hoping.  

December’s jobs data is consistent with a slowly cooling economy and a soft landing in 2024. But the data doesn’t rule out a recession, as the economy grew at a slower pace last year than in 2022.  

Bond Market, TLT Bulls Still Expecting Rate Cuts 

While the Fed’s infamous “dot plot” shows 75 basis points of rate cuts in 2024, the bond market expects much more than that, implying that bond investors see a not-so-soft landing this year. 

On Friday, the bond market forecast that the Fed will hold rates steady at its next meeting in January (95.3% vs. 93.8% on Thursday), but places 70.8% odds that a 25-basis point cut will come in March and at least 50% odds that as much as 200 basis points of cuts will come by year’s end. While the jump of 20% in TLT’s price from the Oct.19 bear market bottom to the end of 2023 may later be seen as an overbought scenario, the bond market appears confident that the U.S. economy is at more of a risk of recession in 2024 than the Goldilocks soft landing crowd expects. 

Kent Thune is Research Lead for, focusing on educational content, thought leadership, content management and search engine optimization. Before joining, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 


Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 


Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.