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When I bought shares of the iShares 7-10 Year Treasury Bond ETF (IEF) back on June 28, 2016, it was in the belief that the Federal Reserve would raise interest rates (as early as September or as late as December) while other central banks remained committed to their own programs of asset purchases and lower interest rates. That disjunction would, I thought, bring money looking for a slightly better return and a slightly stronger currency into U.S. assets, such as Treasuries. There was a good chance, I figured, that under that scenario even when the Fed raised the short-term rates it controls, that long-term and medium term Treasury bond yields would fall on higher demand for those assets.

That scenario looks to me now to be wrong. The Fed is still going to raise interest rates I believe, in December, but other central banks are making noises about ending or at least trimming back their programs of asset purchases sooner than I expected back in June. That means that while U.S. interest rates are climbing, the bond markets are likely to start to anticipate a the end to those programs of quantitative easing by other central banks and take yields in those markets higher as well.

The drop in oil prices on the news that OPEC is having trouble agreeing on production cuts (with the attendant decrease in inflation fears) gave U.S. Treasuries a boost today with the iShares 7-10 Year ETF gaining 0.08%.

I’m going to sell this ETF on Tuesday because the scenario behind my purchase has changed. If you are more nimble than I am, you might see if the next day or two or three brings a slight gain in this position on a further decline in oil prices. But one way or the other, holding this position no longer seems a reasonable bet on the direction of cash flows in global markets.

As of the close on October 31, I have a 2.2% loss on this position since I added it to my Jubak Picks portfolio on June 28, 2016.