TLT Investors Grow Pessimistic Ahead of PCE

TLT Investors Grow Pessimistic Ahead of PCE

A hawkish comment from a Fed governor sent prices lower.

Research Lead
Reviewed by: Staff
Edited by: James Rubin

The countdown to the PCE is growing louder as the bond market grows more nervous. 

Investors must again guess how the Fed will interpret the Personal Consumption Expenditures report set to be released ahead of the opening bell Friday morning. 

Judging by the two-day price decline for the bond market proxy iShares 20+ Year Treasury Bond ETF (TLT), investors’ recent optimism about inflation and rates has turned pessimistic. 

As of Monday’s market close, TLT’s price had gained more than 4% in June as investors began to feel more confident about cooler inflation following two months of softer economic data. 

But the mood shifted quickly Tuesday.  

Speaking at the Policy Exchange in London, Michelle Bowman, a voting member of the Federal Open Market Committee (FOMC), made a hawkish comment about monetary policy. 

“I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse,” said Bowman in Tuesday’s speech. 

Following the Fed governor’s remarks, TLT’s price dropped 1% and it fell another 1% by midday Wednesday.

TLT Price Movement and FOMC Voting Members

While investors in rate-sensitive bond ETFs like TLT may feel nervous when a FOMC voting member makes a hawkish statement, such utterances are part of a larger picture. There are 12 voting members with varying opinions that can range from a tight monetary policy to a more dovish approach.  

More recently, the Fed’s data-dependent stance has remained consistent among all voting members, meaning that economic data on inflation and unemployment will be the primary driving force in any rate decisions. 

Here’s a breakdown of FOMC voting members:  

  • Seven members from the Board of Governors of the Federal Reserve System. 
  • President of the Federal Reserve Bank of New York. This is a permanent voting position. 
  • Four presidents of other regional Federal Reserve Banks. These positions rotate on a one-year basis among the remaining eleven regional bank presidents. 

While all twelve Reserve Bank presidents attend FOMC meetings, only the four designated members cast votes on policy decisions. 

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.