30 Year Treasury Bonds Decline After Fitch Downgrade

30-Year Treasury bonds decline sharply after Fitch downgrades the United States Long-Term Ratings to AA+ from AAA. The decision came after the first downgrade of the U.S credit over a decade ago. Analysts argue the second downgrade was long overdue illustrating deteriorating governance and continuous standoff citing political division. Fitch notes:

"Erosion of Governance: In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025. The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process. These factors, along with several economic shocks as well as tax cuts and new spending initiatives, have contributed to successive debt increases over the last decade. Additionally, there has been only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population. " https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023

We could see further depreciation in U.S Treasuries across the board a the Fed is expected to make further hikes this year. 30 Year Treasury Ultra Bonds (/ZB) are heading towards $116ish levels as the U.S Corporation is expected to be depleted by 2025. Let's see how the 🎲 roll.

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