Bill Ackman - Treasury Trade
Hey all -
Saw another post on here that requested an explanation of hedging and was inspired to ask a question I've had back of mind for a couple days.
As context, I'm currently working in PE so trading any form of securities is well out of my wheelhouse. Was wondering if any individuals on here are able to explain Bill Ackman's recent shorting of 30-year treasuries? It hit a lot of the major news sites but I'm quite candidly I'm not sure if I understand what the trade implies, nor do I know if I fully understand the movements of treasuries in general beyond reading the headlines in the news. Wondering if any individuals out there are willing to provide an ELI5 version? I'll surely have follow ups to make it go beyond the basic explanation very quickly!
Thanks in advance for any time on this basic question
Very common curve steepener that in most simple and brief explanation is a bet on the the inversion reverting and inflation moderating.
Thanks for the response
Hoping to work backwards to make sure I understand. You mention "Bet on the inversion reverting and inflation moderating". Inflation moderating would lead to lower interest rates in the long term, correct? What is the implication on that for 30-year treasuries? These currently have a high interest rate so wouldn't their price increase in value as rates drop? I realize I'm wrong here because that's the opposite of his trade but hoping to understand where my gap is
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