More problems for treasurys
good news for us buyers/rate chasers though? About to buy some at 4+% and debating how long to lock in rates. Don’t need the $ for a few years but what if they go north of 5%
Interest rates down big time today but stocks are up about 4%. For now, the important factor is don’t fight the fed.
Hit Peak/terminal rates? Not sure if we’re out of the woods yet…
Far from it IMO. But for now on sideline not buying anything longer than 6 months.
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How do you feel debt limit next month affect things? Apparently lot of liquidity issues too unlike last time in 2020
Makes headlines, won’t matter. One thing Our Betters can agree on in Congress is wanting to spend more of our money.
Meanwhile, on the investment front for bonds.
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Agreed, used to be GOP was fiscal conservative too (not just social) . Now they’re both drunk sailors. I do think Fed deficits will affect terminal rates when Treasuries if hit say 5.5%+
Good graph. Mean reversion means better days ahead??
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We are testing the limits of Stein’s law
if something cannot go on forever, It will stop
The debt limit is kabuki theatre. The real issue is as you observed how long will the world keep buying our debt?
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I just bought some six month t-bills for 4.69% while the 10 year T-bond is 110 basis points less, 3.59%. The fed’s “terminal rate” is supposed to be over 5% and they swear they won’t lower it for a while. But as Lord Keynes observed
The market can remain irrational longer than you can remain solvent
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The five year tips auction yesterday came up with a real rate of 1.504% on the breakeven inflation of about 2.23%. Pretty good numbers in the opinion of the Tipswatch columnist
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I guess they blew right thru it
Re; rest of the world… TINA
In a tax deferred account, I think a tips ladder is superior. The tax accounting in a taxable account is complicated but doable if you are organized.
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As expected, the Fed increased the discount rate by quarter percent. The all important jawboning by Powell was that they’re not backing down soon yet the interest rate curve is strongly inverted.
Edit. I bought some six month tbills yielding 4.8%. No state tax here in TaxaFornia
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I’m thinking the 4-week T-Bills follow the FED rate, so they’ll be at 4.75% shortly and 5% after next meeting and stay there for a year… making any longer-than-4-week but still short-term bets not great.
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As of now, 2/1/23 1800 PST, the 3, 6 and 12 month T-bill rates are 4.6, 4.75, and 4.59%. The 2-year note is 4.1%
Edit. The four week t-bill rate has fluctuated around 4.5% the past two weeks. The difference with the six month rate is about 25 to 30 basis points.
Give it a day or two, jeez 
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The six-month rate breaks the 5% line. The 4-week T-bill rate is 4.55% while the six-month rate is 5.01%.
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Bridgewater on how rising rates haven’t done enough and the Fed will need to do more.
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The 10 year treasury breaks 4%. If I recall correctly it was at 4.3% last year. The two year is at 5%.
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