Government bonds sold off globally on Sept. 2, 2026, extending a rout that has pushed borrowing costs to multi-decade highs. The yield on German 10-year bunds, the benchmark for the euro area, rose to its highest level since 2011, as quoted on CNBC. Japan’s 10-year yield topped 3% for the first time in three decades on Sept. 1, 2026.
The U.S. 10-year Treasury yield hit its highest level since November 2023 (per CNBC), while British 10-year gilt yields hit a fresh post-2008 high to start September.
Inflation and Fiscal Concerns Pressure Bonds
Investors have been rattled by renewed inflationary worries, particularly as fresh Middle East conflict has pushed oil prices higher. United States Brent Oil Fund LP BNO has added more than 9% over the past week. This has added to longstanding concerns about the fiscal positions and elevated debt burdens of major economies, including the United States, Japan and France.
Central banks around the world are also expected to raise interest rates this month, which is typically negative for bonds. Federal Reserve Chair Kevin Warsh struck a hawkish tone in his Jackson Hole speech last week. Meanwhile, the Bank of Japan could raise rates to support the weakening yen, while markets are fully pricing in a European Central Bank rate hike.
Inverse Bond ETFs to Play
ProShares UltraShort 20+ Year Treasury TBT
The underlying ICE U.S. Treasury 20+ Year Bond Index includes publicly- issued U.S. Treasury securities that have a remaining maturity greater than twenty years and have $300 million or more of outstanding face value, excluding amounts held by the Federal Reserve. The $297.1 million ETF charges 93 bps in fees and yields 2.52% annually.
ProShares Short 20+ Year Treasury TBF
The fund follows the ICE U.S. Treasury 20+ Year Bond Index. The $115.5 million ETF charges 95 bps in fees and yields 2.66% annually.
ProShares Short High Yield SJB
The underlying Markit iBoxx $ Liquid High Yield Index is a modified market-value weighted index designed to provide a balanced representation of U.S. dollar-denominated high yield corporate bonds for sale within the United States by including the most liquid high yield corporate bonds available as determined by the index provider. The $45.5 million ETF charges 95 bps in fees and yields 3.60% annually.
Bottom Line
TBT, TBF and SJB offer different ways to position for further weakness across long-term Treasuries and high-yield bonds. However, inverse ETFs are volatile in nature and are better suited for tactical strategies rather than long-term holdings.
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ProShares UltraShort 20+ Year Treasury (TBT): ETF Research Reports
United States Brent Oil ETF (BNO): ETF Research Reports
Proshares Short 20+ Year Treasury (TBF): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).