BKT: With A Resurgent Inflation Picture, Leveraged Duration Is Not Attractive (Rating Downgrade)

BlackRock Income Trust is downgraded to 'Sell' due to a deteriorating macro backdrop for leveraged MBS CEFs. BKT's 6.4-year duration and 25% leverage expose it to rising intermediate rates, with no rate cuts priced for 2026. The fund's 10% distribution is unsustainable, relying on excessive return of capital and eroding NAV.