Estimated Impact of a 1.5% Fed Rate Cut on Long Treasuries
Federal Reserve cuts of 1.5% for the period from October 2025 to October 2026 would strongly benefit long-term Treasuries and leveraged ETFs. This summary shows estimated percentage impacts for TLT, UBT, and TMF under a 1.5% drop in long-term yields.
Key findings
- TLT (iShares 20+ Year Treasury): approx. +25% — based on duration ~17 and convexity.
- UBT (ProShares Ultra 20+ Year Treasury): approx. +50% — 2× daily leverage.
- TMF (Direxion 20+ Year Treasury Bull 3X): approx. +75% — 3× daily leverage.
Visual snapshot
| ETF | Leverage | Estimated Gain (1.5% yield drop) |
|---|---|---|
| TLT | 1× | +25% |
| UBT | 2× (daily) | +50% |
| TMF | 3× (daily) | +75% |
Context & caveats: estimates assume a smooth, sustained decline in long yields. Daily-reset leverage causes compounding; results over weeks/months can diverge. Leveraged ETFs magnify returns and risk—use for short-term tactical exposure with clear risk controls.
Comparison Table (New)
| ETF | Leverage | 1Y Estimate Gain |
Start Price 2/10/25 | Current Price |
Yeild |
|---|---|---|---|---|---|
| TLT | 1× | +25% | $ 89.55 | $ 86.54 | -3.36% |
| UBT | 2× (daily) | +50% | $ 17.50 | $ 16.38 | -6.40% |
| TMF | 3× (daily) | +75% | $ 40.81 | $ 36.40 | -10.81% |
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