Hoisington Slashes Bond Duration Below 1 Year as It Sees Inflation at 3.5%-4.5%

3 articles · Updated · investinglive.com · Jul 16

Hoisington cut its fund’s effective duration from 20.9 years last September to under one year by June 30, abandoning the long-Treasury stance that defined the firm for decades.
The $2 billion manager now expects structurally higher inflation and long-term yields, putting equilibrium inflation at 3.5% to 4.5% with a meaningful risk of spikes above 5%.
The pivot began after a late-February US attack on Iran drove oil prices higher, helping push the 30-year Treasury yield near 5.2% in May; it traded around 5.12% on Thursday.
Hoisington says larger fiscal deficits, rising debt risk premiums and heavy borrowing tied to AI capital spending are swelling bond supply and undermining the old 1990-2020 falling-yield regime.
The reversal carries symbolic weight because Hoisington built its reputation on the bond bull market; its assets have fallen to under $2 billion from about $5 billion in 2020.

Sources

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Hoisington, a long-time bull on U.S. Treasuries for over three decades, has made a rare shift in stance, warning that the long-running bull market in U.S. long-term bonds may be coming to

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Overview

In July 2026, Hoisington Investment Management made a historic shift by drastically cutting its bond duration to almost nothing, signaling a sharp turn from its long-standing bullish stance on US Treasuries. This move reflects Hoisington’s warning that both inflation and long-term yields are now structurally higher, a major change from the era when US 30-year yields hit all-time lows below 2% in 2020. Since then, yields have generally trended upward, and a global government debt benchmark now stands 19% below its 2020 peak. Hoisington’s action highlights growing concerns about persistent inflation and rising yields, marking a new era for bond investors.

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