The Most Crowded Short in History Is Paving the Way for a Bull Market in U.S. Bonds
An experienced macro trader presents a contrarian thesis that 2026 will be the "year of the bond," with long-duration U.S. Treasuries (TLT/TMF) poised to outperform stocks. The core argument is built on several pillars: gold's 200% rally historically signals deflationary risk, not sustained inflation; the U.S. faces a crushing $1.2 trillion annual interest bill, creating a fiscal doom loop; Treasury issuance is dangerously short-term, amplifying refinancing risk; and long bond short interest is at extreme, crowded levels. Additional factors include cooling inflation, weak economic indicators, deflationary trade war risks, and the high probability of Fed intervention (QE/Yield Curve Control) to lower long-term yields if stress emerges. The trade offers asymmetric upside: TLT yields ~4.5% while waiting, and a 200bps drop in yields could trigger a 35-45%+ price surge, accelerated by a short squeeze. The author has allocated 60% of their portfolio to this thesis, betting on a policy and macro regime shift.
marsbit01/20 06:46
