Bill Ackman of Pershing Square disclosed on Monday that he has covered his bet on long-term Treasury bonds because he thought that due to rising geopolitical threats, most recently the Israel-Hamas conflict, investors could start to purchase bonds as a safe haven.
Ackman stated on Monday morning in a post on X, formerly known as Twitter, “There is too much danger in the globe to remain short bonds at present long-term rates.” “We made up the short bond.”
Initially betting on rising yields due to “greater levels of long-term inflation,” the billionaire hedge fund manager initially declared his bearish position on 30-year Treasurys in August. Since the end of August, the yield on the 30-year Treasury has increased by more than 80 basis points, generating profit for Ackman’s wager.
Given that bond prices and yields move in the opposite direction, Ackman’s wager against bonds was really a wager on rising rates.
Following Ackman’s remarks on Monday, the yield on the 30-year Treasury decreased 6 basis points to 5.01%.