TLT Price Volatility Continues in 2024

The bond market proxy is down 13% but still pricing in rate cuts this year.

Research Lead
Reviewed by: Staff
Edited by: James Rubin

The iShares 20+ Year Treasury Bond ETF (TLT), proxy for the long bond market, is down 13% after three weeks of trading in 2024.  

This steep decline follows a more than 20% jump in the final two months of 2023, which ended the worst bear market in history for bonds—a two-year, 50% slide. This short-lived exuberance appeared justified, as multiple economic reports signaled a softening U.S. economy, steady disinflationary trend and more dovish U.S. central bank forecasting 75 basis points of rate cuts for 2024. 

But just as TLT investors thought the greatest downside risk was over, the double-digit declines returned to haunt them. 

Why TLT is Down in 2024

TLT investors and the broader bond market appeared to push bond prices into overbought territory to end 2023, but early economic reports in 2024 revealed a resilient economy, suggesting a “higher for longer” rate environment, taking the TLT price down.  

The closely watched Consumer Price Index came in unexpectedly hot, advancing 0.3% in December, up from 0.1% in November, and exceeding the anticipated 0.2% rise. Adding further concerns about sticky inflation, initial jobless claims for the week ended Jan. 13 fell to 187,000, an 8% decline from November’s 203,000 and lower than the consensus estimate of 207,000. The most recent total is the lowest level for jobless claims since Sept. 24, 2022. 

The final piece of potential inflationary news to dampen TLT investors’ spirits was the University of Michigan’s Surveys of Consumers showed a reading of 78.8 for January, its highest level since July 2021. Since consumer spending accounts for two-thirds of economic activity, and a happy consumer tends to spend more, the higher for longer concerns may be building further. 

TLT Still Pricing In Rate Cuts

But even as rate cuts appear far off, the bond market still appears to be pricing in rate cuts for 2024. For example, TLT’s price is still 13% higher than its Oct. 19 low and the CME Fed Watch tool shows the Fed Funds Futures market predicting a slightly better than 50% odds that the Fed will make its first rate cut in May. 

TLT investors and other bond bulls looking for reasons to hold their shares can gaze hopefully at other data. hang their hopes on. For example, shelter costs, which represent one-third of the CPI basket, contributed the most to December’s CPI surprise inflation acceleration, and accounted for more than half the monthly increase.  

Bond investors digging deeper into economic reports would also have noticed that the Bureau of Labor Statistics’ New Tenant Rent Index, released in January, shows price decelerations that will likely sink shelter inflation, bolstering CPI data in the months ahead. Furthermore, credit card debt at all-time highs doesn't place consumer spending on a healthy path this year. 

TLT investors may have to remain patient while the potential for more price volatility lies ahead and the Fed remains data-dependent to drive monetary policy. 

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.