Exchange-traded fund investors are dumping Treasuries in a hurry as bets on a global rebound in inflation build across asset classes.

Roughly $639 million was pulled from the $15.7 billion iShares 20+ Year Treasury Bond ETF (ticker TLT) on Monday, according to data compiled by Bloomberg. That was the fund’s biggest single-day outflow since March, when the coronavirus pandemic fueled a selloff in high-quality bonds amid a cash crunch.

The withdrawal comes as growing optimism over Covid-19 vaccine progress and further fiscal aid darken the outlook for long-dated Treasuries, sending 30-year yields to the highest in a year. Meanwhile, the Federal Reserve has repeatedly signaled its intent to keep policy accomodative and let inflation run hot for a period to make up for past misses. As a result, the cross-asset reflation trade should sour demand for TLT and other duration-heavy investment products, according to Academy Securities.

“We see moderately higher yields and steeper curves over the course of the year -- no taper tantrum, but modestly rising,” said Peter Tchir, the firm’s head of macro strategy. “At the margin, demand remains low. People still need to buy them, for all sorts of reasons, but more and more people are underweight or short long-end rate products.”

While inflation has persistently missed the Fed’s 2% target for the better part of a decade, investors are betting that President Joe Biden’s proposed $1.9 billion fiscal aid package and a broad economic reopening will jolt price pressures. Five-year breakeven inflation rates climbed to the highest level since 2013 this week, while the spread between five- and 30-year Treasury yields to the highest level since 2015 on Monday.

That’s breathed life into cyclical stocks -- those with earnings viewed as being more tied to economic swings -- and powered an oil rally. About $2.3 billion has exited TLT so far in 2020 amid the fund’s 5.4% drop, though it managed to gain on Tuesday as risk appetite cooled.

In Tchir’s view, the benchmark 10-year yields have scope to rise as high as 1.9% by year-end, from about 1.14% currently. That rising-rate environment has fueled inflows into high-yield and leveraged loan funds, and brightened the outlook for dividend stocks, he said.

“Look to dividend stocks or something that can pay you more if the economy is doing well and inflation is real,” Tchir said.

This article was provided by Bloomberg News.