Everyone's betting against long-term bonds — Citadel says that's exactly when to bet the other way
Nearly everyone on Wall Street is betting against long-term US government bonds at once, and a major trading firm warns that if that bet starts going wrong, the rush to exit could send bond prices sharply higher. At the same time the Treasury Secretary is actively working to drive long-term yields lower.
Idea
When nearly everyone is betting the same way — here, against long-term bonds — the trade becomes fragile because any surprise forces a stampede of buying from traders exiting losing positions. Citadel Securities is explicitly warning of a 'painful bearish unwind' in this crowded short. At the same time, Treasury Secretary Bessent is actively deploying the Treasury's financial tools to push long-term yields lower, which directly hurts anyone betting against those bonds. If yields fall even modestly, the squeeze on shorts could accelerate a rally in long bond prices, making this a classic contrarian setup.