Lacy Hunt reverses long-term bullish stance on Treasurys after 30 years, signaling trouble for risk assets

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 adjust...