economy
Trading in these two ETFs suggests inflation fears are overblown
It could have been a big week for bond bears, if it weren't for crude oil.
TL;DR
- US Treasuries held firm despite strong GDP and inflation data.
- A steep drop in crude oil prices is seen as reducing inflation risk and the likelihood of a hawkish Fed.
- Options flows around the oil ETF (USO) suggest further price relief.
- Trading in the TLT ETF, particularly put-selling, indicates investors are betting against rising yields.
- Analysts believe inflation may have peaked, potentially leading the Fed to shift from hawkish to neutral or dovish.