ZROZ PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund : Bullish and Bearish Analyst Opinions

"Trueflation... it's at I think 0.7%ish right now... We're in a recession that won't be acknowledged for years." The Federal Reserve is currently keeping rates high based on lagging data, while real-time inflation is near zero and the labor market is deteriorating. Eventually, the Fed will be forced to aggressively cut rates to align with the economic reality of 0.7% inflation and a recession, which will drive bond yields down and prices up. Long duration US Treasuries to capture capital appreciation from inevitable rate cuts. The Fed remains "higher for longer" despite the data, causing short-term pain for bondholders.

Gurevich states, "I think zero interest rates are not off the table... I'm seeing the path to deterioration of the labor market." He adds, "When the job growth is negative, 10-year yield should be much lower... who's selling them at 1% yield?" The market is currently pricing in a "soft landing" or "higher for longer" rate environment. Gurevich believes the labor market is silently rotting. If unemployment spikes, the Fed will be forced to cut rates aggressively (potentially back to zero). Bond prices and yields move inversely; if yields fall to 1% or 0%, long-duration Treasury bonds (TLT/ZROZ) will experience massive capital appreciation due to their high convexity. LONG US Treasuries (specifically long duration) to capture the move if rates collapse. Fiscal dominance (government printing money to stimulate) could reignite inflation, keeping yields high.