According to news sources quoted by the media, Bill Ackman, a well-known hedge fund tycoon and founder of Panxing Plaza, made about $200 million from shorting 30-year US treasury bond bonds.
Insiders said that Ackerman used options to short 30-year US treasury bond bonds. He earned about $300 million from market fluctuations and paid nearly $100 million in royalties to maintain his position.
At the beginning of August this year, Ackerman revealed that he was shorting 30-year US treasury bond bonds because he believed that the long-term inflation rate of the United States would be close to 3%, rather than the 2% set by the Federal Reserve. Ackerman stated at the time that he would not be surprised if the yield on the 30-year US Treasury bond climbed to 5.5% in the near future.
Ackerman stated in August that persistently high inflation may force the Federal Reserve to continue raising interest rates, thereby hitting bond prices and pushing up yields. The bond price is inversely proportional to the yield.
However, Ackerman stated on Monday that he had already liquidated his short positions in long-term US Treasury bonds, as there were too many risks associated with continuing to short bonds at current long-term interest rates. Ackermann warned that the pace of economic slowdown is faster than recent data shows.
As one of Wall Street's most famous bond bears, Ackermann earned $2.3 billion last year by shorting two-year US bonds. In the early stage of the COVID-19 epidemic, Ackerman earned 2.6 billion dollars by betting that enterprises would be difficult to repay their debts.
When Ackerman announced his short selling of long-term US bonds, the yield on the 30-year US bond was about 4.3%. After briefly hitting a high of 5.18% on Monday, the yield on the 30-year US bond has fallen back to around 5.09%.
Some analysts say that given the risk of escalating conflicts in the Middle East, the attractiveness of US bonds may increase, and some investors may view them as a safe haven.