Citadel Securities Strategist Predicts Rally in Long-Term Treasuries

The head of macro strategy at Citadel Securities has shifted his outlook on long-term U.S. Treasuries from bearish to bullish, forecasting a market rally. Frank Flight argues that bearish positioning among trend-following strategies has become stretched and that recent soft inflation and payroll data will likely prompt a more dovish monetary policy response.

This reversal follows a period of intense pressure on long-term bonds, where 30-year yields reached nearly two-decade highs. The rout was driven by concerns over fiscal deficits, inflation, and the high volume of debt issuance required to fund AI infrastructure. In an effort to stabilize the market, Treasury Secretary Scott Bessent announced plans to increase buybacks of bonds maturing in 10 to 30 years.

Flight's new position is supported by a Citadel cross-asset model, which shows that yields fell in 71% of similar historical episodes since 2003. He noted that the current market asymmetry is now skewed toward lower long-end yields.