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On Aug. 2, billionaire hedge fund titan Bill Ackman revealed he was shorting, or betting against, 30-year Treasury bonds using options. The founder and CEO of Pershing Square Capital Management warned that “structural changes” to the global economy—including deglobalization, the green-energy transition, and increased worker bargaining power—would lead to an era of persistently higher inflation and, consequently, higher 30-year Treasury yields. (When Treasury bond yields rise, Treasury bond prices fall. This is why Ackman was shorting, or betting against, bonds.)

But now, Ackman believes that the economy may not be as healthy as it seems, and with conflicts in the Middle East and Ukraine raging, he’s decided to end his bet against 30-year Treasury bonds.

“The economy is slowing faster than recent data suggests,” Ackman wrote in a Monday post on X, formerly Twitter, adding that “there is too much risk in the world to remain short bonds at current long-term rates.”

A flailing U.S. economy and elevated global tensions reduce the likelihood of prolonged inflation or higher long-term Treasury yields. For long-term yields to remain elevated, the Federal Reserve would need to keep interest rates higher for longer, but that’s unlikely if the economy truly is struggling, as Ackman says, or if foreign wars escalate.

Essentially, Ackman’s move to exit his short against the 30-year Treasury could be a sign that his main fear is shifting from an overheated economy featuring higher interest rates and inflation to a slowing economy that could fall into recession amid geopolitical risks.

Although short-lived, Ackman’s big bond short was certainly profitable, though it’s unclear exactly how much money he made. With year-over-year inflation rising from its June low of 3% to 3.7% last month and the Fed remaining mostly hawkish, the 30-year Treasury yield surged from 4.16% on Aug. 2 to just over 5% when Ackman ended his bet.

The trade also appears to have been well-timed. On Monday, the 30-year Treasury yield rose as high as 5.17% before Ackman announced he’d exited his short position and news of the rising death toll in the Israel-Hamas conflict spooked investors, sending the yield back below 5%.

Of course, as is always the case in markets, not everyone agrees with Ackman when it comes to the future of inflation, interest rates, and by extension Treasury yields.

Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Co., explained in a Monday note that wage growth is “still too high and likely incompatible with bringing inflation down to 2%.” He noted that consumer spending remains strong as well, as evidenced by recent retail sales reports, meaning the Fed may have to hold interest rates at a higher level than expected to ensure prices are more stable.

Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, warned that investors are still worried about fiscal instability as well amid political gridlock in Washington and record federal deficits. This could lead them to require more compensation for holding Treasuries in the form of higher yields.

“The growing rout in Treasuries reflects bond investors’ desire to be compensated for an expanding list of risks, which now increasingly include geopolitical instability and demands on fiscal spending, as the country already struggles to finance its deficit,” Shalett wrote in a Monday note. “Developments in Washington, Fed policy, and the level of the U.S. dollar and its role as a reserve currency loom large.”