Concerns over the expected fiscal deterioration in the U.S. over the next three years as federal spending tends to outweigh expected incomes, the growing general government debt burden, and governance erosion have led Fitch Ratings to downgrade the U.S. credit rating from AAA to AA+.

The U.S. Treasury Department announced plans to increase long-term debt sales to $103 billion next week from $96 billion previously. The offering includes $42 billion in 3-year notes, $38 billion in 10-year notes and $23 billion in 30-year notes. The decision to increase debt sales came against the backdrop of a rising budget deficit.

As a result, Treasury yields jumped to the highs of 2023 in the Aug 2 trading session, also spurred by plans of a flood of government-debt issuance. The 10-year yields topped 4.12%, marking the highest level since November 2022, while 30-year yields reached their highest level in nearly 9 months to about 4.2%.

In contrast, even amid positive labor and inflation macrostats, U.S. stocks remain under pressure, and smart traders need to consider diversification of their investments toward buying into ongoing bond declines.

This can be achieved via special ETFs betting against the U.S. Treasury bonds. Thus, ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and Direxion Daily 20+ Year Treasury Bear 3x Shares (TMV) are rising more than 3% on average daily. This is followed by gains of 2.1% for ProShares UltraShort 20+ Year Treasury ETF (TBT), 1.1% for ProShares Short 20+ Year Treasury (TBF) and 0.5% for ProShares UltraShort 7-10 Year Treasury (PST).

Inverse ETFs provide opposite exposure with respective leverages of -2X or -3X of the performance of the underlying indices using various investment strategies, such as swaps, futures contracts and other derivatives. If rising yields keep delivering big gains in a short run, it might be worth buying these ETFs.