What Happens to a Bond ETF's Price When the Fed Cuts Rates -- Using the Actual Historical Data

The article examines how bond ETF prices respond to Federal Reserve rate cuts using historical data from 2023-2026. While short-term Treasuries typically rise when the Fed cuts rates, long-term Treasuries are more influenced by economic conditions, inflation expectations, and risk premiums. Analysis of the iShares 20+ Year Treasury Bond ETF shows mixed results: it gained 4% when cuts were signaled in December 2023 but fell 2% after the September 2024 cut due to rising inflation concerns. Long-term Treasury holders have struggled as inflation remains elevated.