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For more than three decades, if you wanted to know what to do with long-duration US Treasurys, you asked Lacy Hunt. His answer was always the same: buy them. That answer just changed.
Hunt, the 81-year-old chief economist at Hoisington Investment Management, reversed his decades-long bullish call on long-term Treasurys in the firm’s Q2 2026 investor report dated July 16. The shift is the macro equivalent of Warren Buffett announcing he no longer believes in value investing. When the person most synonymous with a trade abandons it, everyone else in the building should probably check the exits.
What exactly changed
Hoisington’s thesis was elegant and, for a very long time, correct. The firm argued that mounting government debt would create a deflationary drag on economic growth, keeping interest rates in a secular decline. That view powered returns for years and attracted roughly $5 billion in assets under management at the firm’s peak.
The new outlook flips that framework on its head. Hoisington now expects long-run inflation to settle in a range of 3.5% to 4.5%, driven by widening fiscal deficits, deglobalization, and the sheer weight of excess government debt.
The portfolio adjustment was dramatic. Hoisington slashed its effective duration from approximately 21 years in September 2025 to below one year currently.
The losses that preceded this pivot tell their own story. The fund dropped 34% in 2022, and assets under management have since fallen from around $5 billion to below $2 billion.
Why the bond world is paying attention
Jeffrey Gundlach, the DoubleLine Capital founder sometimes called the “Bond King,” commented publicly on Hunt’s reversal, highlighting its significance in a fundamentally altered market environment.
Hoisington’s revised inflation forecast of 3.5% to 4.5% also implies the Federal Reserve will have less room to cut rates aggressively, even if growth slows. The central bank’s dual mandate means it can’t simply flood the system with liquidity when inflation is running well above target.
What this means for crypto investors
Bitcoin proponents will argue, not unreasonably, that fiscal recklessness and inflation are precisely the conditions that make a hard-capped digital asset attractive. The “digital gold” narrative gains credibility when governments demonstrate an inability to manage their balance sheets. Hunt’s own reasoning, that debt levels have become so unmanageable they’re now inflationary, is essentially the Bitcoin bull case dressed in a three-piece suit.
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