Trading in these two ETFs suggests inflation fears are overblown

Federal Reserve Chair Kevin Warsh looks on during his first news conference since taking the helm at the central bank on June 17, 2026 in Washington, DC. Chip Somodevilla | Getty Images It could have been a big week for bond bears, if it weren't for crude oil. US GDP came in above expectations and the Fed's preferred inflation gauge printed the highest reading since October 2023 . Yet U.S. Treasuries held firm as the 10-year yield fell to under 4.4% and the iShares long term bond ETF (TLT) added two-thirds of a percent, extending a 5% gain since its low last month. One explanation is that a steep drop in oil prices – crude futures fell about $10 from last Friday's high – is reducing the risk of higher inflation and a hawkish central bank. "It definitely looks bearish and the curve has flattened out a little bit," Phil Streible, chief market strategist at Blue Line Futures, said in a phone call. "I don't see oil in the 50s but it could get comfortable in the 60-65 range." Judging by options flows around the oil ETF (USO) , further relief might be on the way. About 30% more puts traded than calls Friday, with put-selling the least popular directional trade, according to ThinkOrSwim data. Of the $114 million premium traded in the fund, $81 million was tied to calls, SpotGamma data show. …