Market Meltdown Deepens: Long-Treasury ETF Plunges 48%

The iShares 20+ Year Treasury Bond ETF (TLT), the largest long-dated bond ETF, has experienced its largest drawdown on record, losing 48% from its 2020 all-time high. This decline is attributed to the Federal Reserve's higher-for-longer interest rate policy, which has led to rising yields on long-dated US debt. Investors are adjusting to the reality of higher rates and the expectation that they will remain elevated next year. Other long-duration funds, such as the Vanguard Extended Duration Treasury ETF (EDV) and the PIMCO 25+ Year Zero Coupon US Treasury Index (ZROZ), have also suffered losses.