Ackman's bet against US Treasuries pays off with $200 million profit

Billionaire hedge fund manager Bill Ackman made a profit of about $200mn from his high-profile bet against US 30-year Treasury bonds, according to people familiar with the trade.

The founder of Pershing Square Capital Management said on social media on Monday that he had exited the short position he first announced in August.

“There is too much risk in the world to remain short bonds at current long-term rates,” he said on X, formerly Twitter. “The economy is slowing faster than recent data suggests.”

When Ackman announced his latest bet against US government debt, 30-year Treasuries were yielding about 4.3 per cent. After briefly touching a high of 5.18 per cent on Monday, yields have dropped back to about 5.09 per cent.

In August, Ackman had argued that longer-dated Treasury bonds were “overbought”. Stubbornly high inflation, he said, made it more likely that the US Federal Reserve would increase interest rates, hitting bond prices and driving yields higher.

Since then, long-dated Treasury yields have moved sharply higher as investors worry that the Fed will keep rates higher for longer. The outbreak of the conflict between Israel and Hamas earlier this month briefly drove yields back down, before the sell-off resumed.

Some analysts have said that the prospect of an escalating war in the Middle East could boost the allure of Treasuries, which are a haven for investors.