The iShares 20 Year Treasury Bond ETF (TLT), with $45.4 billion in net assets, fell to its lowest price in 22 years Tuesday, down 6% since the start of the year, as the yield on 30-year Treasury bonds climbed above 5.33%, its highest level since 2007. The fund is run by BlackRock, the world’s largest money manager, with $15.3 trillion under management as of June 30.

What is causing the sell off in bonds? Oil prices above $90 have renewed fears that inflation will stay high. The federal government ran a $432.3 billion deficit in July, its largest monthly shortfall since March 2021, and must keep selling debt to cover the gap. Technology companies are on track to borrow half a trillion dollars this year to build artificial intelligence infrastructure, giving investors more bonds to choose from. All this translates into higher interest rates and lower bond prices.

Those forces explain why TLT and many other bond funds are down. They don’t explain why........

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