I’m not sure why you assume “regular posters” want to read that. You already have the right-wing grievance thread. I have no doubt that the constant injection of politics has driven people from this site.
What is the criteria for “regular posters” anyway? I’ve posted here over 100 times.
With a nominal 30-year Treasury bond trading today at 4.29%, this TIPS gets an inflation breakeven rate of 2.32%, which is in line with the February result but higher than other auctions of this term over the last decade. Investors in this TIPS are betting that inflation will average higher than 2.32% over the next 29 years, 6 months.
That’s a fair criticism. I recall when it seemed the other way around, and didn’t particularly care for it. I will try to keep your comment in mind on future posts in a lot of the threads.
Where is that one?
Seriously?? The “Social Credit in America” is mostly just various complaints about “wokeness.” Much of it has nothing to do with finance.
Anyway, that’s enough off-topic discussion on here.
On September 21, 2023 the 2 year rate is 5.14% and the 10 year is 4.47%. Here in CA, the effective taxable rate is about 1.1x
Treasury two-year yields will reach 5.43%, a level not seen since December 2000, if the Fed were to raise rates once more in this cycle and the US labor market continues to stay resilient through the spring of 2024.
…
Almost a year ago, traders were similarly skeptical of the dot plot and reckoned that the Fed, whose benchmark rate then was 3.25%, would stop at 4.50%. And yet we are at 5.50% and counting.
$1.7 trillion annual deficits have consequences. To paraphrase, 1 trillion here 1 trillion there pretty soon you’re talking about real money.
A little math reminder, at 5% interest rate, the interest on $100 billion is $5 billion
The Treasury will sell $112 billion in new notes and bonds this week, the largest slate in two years, as stocks remain acutely sensitive in interest rate risks.
While I haven’t been watching bonds, the short term Tbill market is getting slightly trimmed … not a ton, but the trend seems down. I suspect the longer term will go up.
The 30 year treasury bond auction did not go well. Rates are up.
More consequences
“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”
ouch. was hoping it would be range bound in lower 4s and allow mortgage rates to stay below 8. We shall see
David Enna comments on the recent CPI print, catch my Wall Street lingo 
, and Fed discount rate
Michaels Ashton, my inflation guru friend, posted this commentary:
The CPI was a happy surprise today, but not so much that I would throw a party. … We’re still just starting the difficult part, from the standpoint of monetary policy but also from the standpoint of figuring out how quickly inflation can get tamped back down to target. …
What I can say is that the market reaction to all of this is absurd. This just doesn’t move the needle on the Fed. There was no tightening and no easing in the pipeline before this number, and after this number that hasn’t changed an iota.
I have been thinking that the Federal Reserve knows it has reached its peak short-term rate, now set in the range of 5.25% to 5.50%. This has been aided by a recent rise in longer-term yields, which appears to be reversing a bit this morning. Fed officials will probably continue with “cautious” statements, but this cycle of rate hikes appears to be over.
Will rate cuts begin in 2024? That’s a complete mystery.
Ken believes we could see one of the biggest rebounds in history in the bond market this year:
So best ETF for this bet? Would be great to be safe and get stock like returns like he’s saying…
I don’t know about “best”, but I chose FXNAX (Fidelity US Bond Index Fund) for my 401k. Expense ratio is 0.025%.
Bond market is definitely not pricing in “higher for longer” with several expected Fed rate cuts for late this year and next. I’m not so sure.
Are we dropping 1.5% by EOY?
Same here. I am rolling over fixed income into six-month t-bills at 5.2%. I sold a $10k, zero fixed rate I-bond earlier this year and may replace it later in the spring with the 1.3% fixed rate.
I’m not so sure I’d want that either. If the Fed needs to cut 1.5% in 9 months, wouldn’t that mean the economy would be in rather poor shape by year end?
Or the Fed is trying to bolster Biden’s re-election prospects by pumping up the stock market with rate cuts. Why would you talk about cuts when the economy is still strong and inflation, esp core inflation, is still running at 3-3.5%?
That chart doesn’t show what the Fed is doing, it’s what the plurality of the rate futures traders think the Fed will do. And from what I recall, the predictions beyond the upcoming meeting are often wrong.
No, it would only mean that inflation is expected to be low enough to allow rate reductions. The economy could still be in a good shape.
Isnt it the rate at which roughly half the traders think it’ll be higher, and half think it’ll be lower (half the money volume, regardless of the number of peolpe behind the money)? No one is investing in futures in the hopes that they nail the future rate exactly, they’re all betting the over/under.
I locked a bunch in long term (5yr) at 5.4%. I’m skeptical of rate cuts, but don’t see rates rising any, either. More mainstream long term rates may drift up some due to their currently depressed state, but I don’t see them clearing 5% and I think 5.4%.will prove to be the top rate going forward for quite a while.
