The 'widowmaker trade' of the ETF continues, with a large amount of funds continuously flowing into the USA treasury bond ETF despite the fall in treasury bonds, betting on the peak of interest rates.

According to Bloomberg data, last week, Direxion's $Direxion Daily 20+ Year Treasury Bull 3X Shares ETF (TMF.US)$ received an inflow of 0.625 billion US dollars, setting a record high. In addition, under Blackrock, $iShares 20+ Year Treasury Bond ETF (TLT.US)$ also received an inflow of 1.4 billion US dollars, surpassing the previous week's inflow of 1.6 billion US dollars.

Last week, the USA treasury bond market experienced a crazy week, first facing significant selling pressure after Trump's election victory, causing yields to surge across the board. $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ Once soared to over 4.47%, but then reversed course, with traders closing out positions on the "Trump trade", strong 10-year U.S. Treasury auction, coupled with the impact of Fed rate cuts, the 10-year U.S. Treasury notes yield fell by more than 8 basis points this week.

Last week, $iShares 20+ Year Treasury Bond ETF (TLT.US)$ and $Direxion Daily 20+ Year Treasury Bull 3X Shares ETF (TMF.US)$ also both rose, with TLT rising by 1.82%. However, looking at a longer time frame, from a medium to long-term perspective, TLT has fallen by over 6% since the beginning of the year, while TMF has plummeted by nearly 25%.

Yet funds continue to pour in. $iShares 20+ Year Treasury Bond ETF (TLT.US)$ This year has attracted approximately $14 billion in inflow, making it the third largest annual fund inflow since its inception, while TMF has attracted over $3.3 billion during the same period, marking its second largest annual fund inflow.

In fact, since 2020, neither of these two funds has seen positive returns. Bloomberg Intelligence analyst Athanasios Psarofagis said: "You buy..." $Direxion Daily 20+ Year Treasury Bull 3X Shares ETF (TMF.US)$ because you think interest rates will fall, but this trade seems to have never worked. It has hurt a lot of people's hearts.

With the U.S. economy remaining robust, the Federal Reserve significantly lowered interest rates by 50 basis points, coupled with the possibly aggressive fiscal stimulus policies that may be introduced after Trump took office, causing market concerns that U.S. inflation may reignite. This led to intense selling pressure on U.S. bonds since September, with the 10-year treasury notes yield rising from around 3.5% to approximately 4.3%.

Currently, the market expects the Federal Reserve to keep interest rates at higher levels than previously anticipated. Pricing in swap contracts shows that traders expect the Fed to lower the benchmark rate to 4% by mid-2025, a full percentage point higher than their forecast in September.

This means the pain of the 'widow trade' may continue. (In the financial investment field, high-risk trades that are prone to huge losses are referred to as the 'widow trade.')

LPL Financial's strategy team wrote in a report on Monday:"Better economic data, possibly overly dovish Federal Reserve, and more policy details from the Trump administration could push up US Treasury yields... Only in the case of negative economic surprises would the yields see a significant decline from their current levels.

Editor/Rocky