Bill Ackman is betting heavily on a fall in the value of the 30-year US Treasury after the US downgrade to hedge against the impact of higher long-term interest rates on equities.
Bill Ackman, the founder of Pershing Square Capital Management, sees this strategy not only as a protective measure, but also as an opportunity with a high probability of success. In a post on X (formerly Twitter), he explained that he was “short in size” on the US 30-year Treasury because it was “a highly likely single bet”.
“I’m surprised at how low US long-term interest rates have stayed given the structural changes that are likely to lead to higher long-term inflation, including de-globalization, higher defense costs, the energy transition, growing entitlements and greater bargaining power in the US workers,” Ackman said in the tweet.