Will T-Bill Yields Hit 10% | How To Buy Cash Management Bills On Fidelity & E-Trade (Treasury CMBs)
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- Опубліковано 5 чер 2024
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The debt ceiling, projected 10% T-Bill yields as well as CMBs & even more CMBs (cash management bills) - that’s what I’ll be talking about in today’s video:
1) Who’s projecting 10% T-Bill yields & how realistic is this?
2) Why have there been so many CMB auctions lately & why even more may be coming our way?
3) How can you find CMB auctions on Fidelity & E-Trade?
4) What’s being auctioned off this week?
#jenniferlammer #bonds #fixedincome
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SOURCES
www.bloomberg.com/news/articl...
www.nytimes.com/live/2023/05/...
www.treasurydirect.gov/auctio...
www.treasurydirect.gov/auctio...
www.fidelity.com/
us.etrade.com/home
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most likely the CMB maturity dates we are seeing has to do with the Fiscal year end of the Government. I would expect a congressional / white house fight in Sept / OCt when the budget year end comes around.
lol, I'm stuck with trying to find the CMB tab in Treasury Direct. I click on the Buy Direct tab and everything else , Bills, Notes, Bonds, etc. is there but no CMB tab.
I found it. I had to log out first.
I looked for information online about how to report CMBs on federal taxes but couldn't find anything. Do you need to do anything special, any special forms?
Jennifer my wife wants to know why I don’t listen to her the way I listen to you.😂
Because Jennifer Makes us Money whereas Wives take our Money 😂
LOL!
@@nickavita537 hey now my husband says the opposite but I'm also watching these videos lol
@@nickavita537 Well that's incredibly 1950s, Nick.
Jennifer, thank you for your loud and clear voice and always getting to the point without a bunch of small talk that adds no value.
I think that the weird number of days for most CMBs is that what the treasury is doing is just amending an earlier longer-term T-Bill offering to add more dollars to that offering (like going from 50 billion to 85 billion) and then looking at how many days would remain until the original T-Bill maturity date. Notice how CMB all have the same CUSIP as some other longer-term T-Bill. Amending the offering size is possibly the only way they can make these CMB offerings.
This is a very common practice on all Federal contracts. The legal classification of the contract determines the limit on how much money the contract can be used for.
Sounds good for us savers, But could you imagine the implications of these high treasury rates? Credit card interest rates, home mortgages, auto loan will rise in unison.Not good at all for these industry’s. Another great video thank you Jennifer
It is the time of super savers .
You're welcome Steven - like I always tell my kids, start saving as early as you can
Good. It's time for prices to drop.
I thought I was somewhat savvy in financial jargon but I never heard or knew about CMB's. Thanks a bunch Jen!
Wow. I really learned something this Sunday morning! I didn’t even know shorter term CMBs were available on the ETrade platform. Thanks!😊
Have you figured out how to buy via eTrade?? I haven’t been able to see the new 21 day CMB on my ETrade account for the past few days and today is auction
you are amazing. every time you push a new video, I learn something new
Thank you for the demo on purchasing a CMB. It's very helpful.
IMO, I don't see the appeal on CMB's. Tbills have been going for over 5% lately. If that were to decrease, and CMB's are higher, one should consider. Thank you for these videos, I appreciate it.
Thanks so much for this info! I had no idea... Thanks again..
Thanks for the good info.
No CMB here yet. I’m sticking to 4 week T-Bills for now. Thanks for posting this video! 😊
You're welcome Boris!
Bought CMB's today. Thank you for the education on these unique investments. Still getting used to the odd timing of the return on this and the T-bills. Best,
Glad you enjoyed the vid!
At each maturity date i am adding more to each step of my ladder.
Thank you for the video
You're welcome
Thank you!
Great explanation of CMBs! Kinda of quirky that Fidelity doesnt label them as such…..
Jenn…I have a Vanguard account and I have found that is one knows the CUSIP number, it can be purchased. I have been able to buy both 4- week bills and CMB’s.
But I think that is in secondary market not the primary auction
Good info. Thx.
Just wanted to update the fidelity search shows cmbs on new issue treasury auctions not Just the bonds tab. The cmbs are under new issue treasury with all other announced T bills
Thank you for this info on CMBs. I could not find the 5/25 issue for 21 days on the Fidelity website despite following your instructions. Any idea why that would not be offered?
I'm currently in a holding pattern. Just not sure what to do. I'm pretty sure this debt ceiling impasse is going to the wire. I don't think there will be a default but who knows? Unless yields get ridiculous this week I'll probably just keep it in my Vangaurd MM. If the stock market drops 20 percent like last time we had an impasse, I might put some there.
Thanks for sharing Murray
@@Chris.Brisson not gonna happen but if it does nowhere is truly safe
Its being suggest that I invest upcoming maturing Treasury's into short term CD's just for the FDIC protection just in case our politicians decide to Default. I guess it makes sense to protect that money at this point rather then lose those investment $ to a default. I have a few days to decide.
how do i know what i was paid for a 4 week tbill? I cant seem to see it in trade? thanks.
Hi Jenifer
I have cash position in fildelity core, money market. I get monthly dividend on those. Can you confirm if I invest in T bills or CMB during the month, will I loose partial month dividend on those? In that case purpose of investing in higher yield CMB will be defeated.
Can you confirm and suggest which core position to choose for parking cash in fidelity to earn interest or dividend on daily basis.
I like the ways she clear and loud enough to keep my attention. Very nice
Thanks Jenn.
Hi Jennifer!!! Glad to know I can purchase these on Fidelity. What is the appeal? It sounds just like a T- bill.
Two question
What happens to the cmb after mature, can reinvest in another o mo?
2 what's t bills is the equivalent to a cmb?
I came back around to this as I was looking at the treasury tbill schedule and the number of six week CMBs. I’m betting that at some point in time, we’ll see a six week tbill and maybe a 21 week tbill. There is just so much debt need. I’ve seen the 42 day cmb that looks like it is every week. I remember in 2022 when the 119 day cmb happening nearly every week and then was upgraded to a full 17 week tbill last fall. My statement on a 21/22 week tbill is mere speculation on my part as I look at the increase in treasury debt. Jennifer’s older videos are helpful to keep up to date with potential thinking.
Thanks for sharing Wallace!
as volatile as the market for treasuries is and will be during the debt ceiling, i think it would be a good idea to show everyone how to put in a limit order on treasuries instead of jumping right in on the ask. Lowball them and see if they panic and bite
Treasury is supposed to release an update of the "X" date calculation this week. If Treasury can get to June 15, when quarterly tax revenues come in, then this new cash in the TGA could allow the government to function and allow negotiations to continue into the summer. OTOH, this could mean volatility in the short term Treasury market would continue for a while, and maybe we do see those higher blip rates that PIMCO said could be possible.
I’ll do my part and send in my June estimated payment on the 1st, lol
I’ll get my mom to do the same, hers is a lot more
@@g.t.richardson6311 Yeah, I have to file too. I file online using IRS Direct Pay, usually at the last minute. But maybe I'll do it early so my Mom gets her Social Security, lol.
Real good if you’re invested in floating-rate notes.
@@davidr5098 Interest accumulates daily and is paid quarterly. Interest rate is reset weekly to the most recent 13-week T-bill rate plus a spread determined by the Treasury auction that issued the FRN. FRNs have 2-year maturity.
Thanks, I couldn't find a CMB w/ higher rates than other T-Bills. But will keep in mind!
You’re welcome - CMBs aren’t usually scheduled & are not as frequently auctioned in the recent weeks after the debt-ceiling issue was resolved
Awesome Thanks
This has nothing to do with anything, but I have a question.
Does it really matter if banks compound interest DAILY or MONTHLY? APY takes compounding into consideration. So 5% APY should mean that your money will grow 5% in 1 year, regardless of how often it is compounded. Is this correct?
Im putting my expiring CD's into short term T bills and CMBs. I am putting some liquid money into the 21 Day CMB because it will make more for the 21 days than sitting in the bank. So why not, its only 21 days:)
Thanks for sharing!
Jennifer, thanks for your continued great videos. However, I don't understand the appeal of CMB's. They seem to have the same or close to same yields as normal T bills.
Their appeal (IMHO) is that they allow you to invest in some hole one might have in their cash flow. For instance Property taxes are paid on december 12 so if you find a CMB that matures on December 7th you are pretty much set..
I'd like this explained as well. Thank you!
I see them as ways to deploy cash in between other auctions. If I missed a tbill auction for example and a cmb pops up I can grab it.
The CMBs are just a reissue of a previous Tbill. The 156 day one is a reissue of a 26 week Tbill but now has a slightly less duration time.
I bought 2 4 week T-bills Jenn.
Vanguard Federal Money Market is currently 5.02 and Schwab Value Advantage Money Fund is at 4.90 for comparison sake. Would like you to maybe explore MYGA's and CLOSED END FUNDS with your unique take
Is this Vanguard Federal Money Market you referred to the same fund in which Vanguard automatically "park" your fund? How did you check the rate? Thanks.
I just paused the video and bought a zero coupon bill with the change in my fidelity account that looked like a 3-week duration since maturity is 6/15, I assume this is a CMB? Rate is 5.44%. That was fun. I mainly love saving the state tax.
Wow - that rate seems to keep going up!
I've been following CMBs on Fidelity and I've yet to see the most current CUSIPs posted on TreasuryD, especially the short duration/high yields CUSIPs.
You should sign up for their mailing lists to get notified of CMBs + you don’t know the yield before the auction
I noticed Schawb also offers CMB's. The rate for this weeks auction is noted at 5.1.
Which CUSIP are you searching? I just logged on (6/12 @ 12:31 ET) and there is no CMB auction listed.
So what’s the difference? I can bill Tbills or CMB with the same maturity date and rate in Fidelity !!!
What is the advantage of buying at auction over buying in the secondary market?
ua-cam.com/video/vltydeB1d1o/v-deo.html&ab_channel=DiamondNestEgg
No spread.
Not buying this week but I have $50k T-Bill expiring in early June. I'll roll that into my regular 17 week ladder. Cha-ching!
Thanks for sharing
I started a 4 week T-bill ladder. It's nice getting that weekly income!
Any reason for the 4-month treasury to jump to 5.658% on Friday(5-19-23)?
Our Emperor (government) is being exposed, and everyone sees that he has no clothes. We be broke. 😂
Will t bill yields hit 10percent for 1 year. Will any of them notes be available in the new future
Has anyone figured out how to avoid the weeklong gap between a CMB (or T-bill) maturing and settlement date of a new Treasury at Fidelity? For a T-bill that doesn't have auto-roll available, it seems I have no choice but to wait until the maturation date of the old bill to place a new Treasury bill order. At Vanguard I'm able to place a new Treasury order with a settlement day for the new bill that is the same as the maturation date for the prior bill - the system seems able to figure out that the funds will be available by the settlement date. Thus I can do back to back 17 week bills at Vanguard without a weeklong gap but I can't figure out how to do the same thing (even manually) at Fidelity. Does anyone know how to do this?
You can try giving them a call to see whether they have a solution - I called them today (on something else) and got through relatively quickly. And if you do get a good answer from Fidelity, do let us know when you get the chance!
@@DiamondNestEgg I spoke with Fidelity today. Yes, you can place a new order with "unsettled" funds that will mature the day of the new bill's settlement, however you have to place the trade through them directly by calling and asking for their Fixed Income specialists from 8a-8p Eastern (can't do it on their website but they can do a workaround to get the order placed). I also reminded them that they have no auto roll yet for 17 week bills...they kinda mumbled and said they hadn't done that yet...lol. You can call and get that re-order placed, too, over the phone in order to roll into a new bill without the week gap, but it does mean an extra phone call. Hopefully they'll get around to doing that eventually (as well as hopefully a couple of other changes I pointed out where they were behind Vanguard). They were quick to answer and transfer me to the right person. Also, at least you can buy the CMB's at Fidelity, which you can't do through most others. Hope this info is helpful to some of you - and as always, thanks, Jenn!!
Thanks for the update - definitely good to know. Will share in one of the coming videos!
Look at the 20 year bond. Nearly 4%. Wow.
***ONE*** DAY CMB auction 6/2/23 - settles 6/5 wow! Talk about trying to cover your debt ceiling butt! :)
Great video. Could you buy CMB’s in an IRA?
Yes
@@DiamondNestEgg Thank you!
Just curious if anyone has considered investing in a foreign government bond? If so, are the taxes complicated? Thanks
I looked into Brazil and to many rules. Complicated a big "yes".
If the government defaults does that mean I could get nothing for my Tbill?
Most likely it means your payoff gets delayed rather than canceled. Outright repudiation of debt is extremely unlikely, I don’t think Biden is malicious and stupid enough to do it.
Jennifer, where's the 10% TBIll ? I'll do auto roll on that ...
Can I cancel my T Bill after the auction date but before the issue date? Assuming I put my T Bill order in before the auction date.
You should contact your broker or TD directly to find out what the cut-off times are
@@DiamondNestEgg Oh sorry I should’ve specified. I meant through Treausry Direct?
So I bought a cmb on etrade a couple months ago. The list on treasury direct showed it was like 5.26%.
But my pay out via etrade was .05.
Can you help me understand?
I only made $12 for a 21 day cmb
Rates are annualized
Bought 21-day CMB auctioned on 5/23 with investment rate of 6.326% 😀via Fidelity.
So did we
Yep, I jumped on that wagon too. GLTA
Curious if you can view the 21-day CMB to be auctioned on 5/25 via Fidelity. I don't see it listed but will check again tomor'w.
Does Cmb offer higher rate than t bill? Is Cmb interest taxed for both fed and state?
The latest one came in over 6% but was short time frame of 3 weeks. Only Fed taxed.
@@SergioRuiz-wx8hw where did you see 6%? It's over? Is CMB as safe T-bill?
@@jennylee8970 Yes, just a T bill same as others only has different maturity time frames than the regular scheduled ones. I use Fidelity to purchase CMBs
Sticking with 6 month ladder for now.
Thanks for sharing
Hello very interesting. Assume CMB are state and local tax free?(NY)
Looking this info up, it looks like they’re expert from state and local tax but not federal similar to t-bills
Yes - same as T-Bills
Treasury Direct is listing a 21 day CMB for 6.326%
Thanks
I didn't see that one. How do I find it?
@@alb6804 Treasury Direct.
Please forgive my ignorance but is currently invested money in treasuries wiped out if government defaults. Thank you
ua-cam.com/play/UUMOnexoc6tvesvcCEzZhmI-Ag.html
Great question on the minds of many. Since so much at stake, and a great chance to become educated on this topic (that is sure to come around again in our lifetimes!), I decided it was worth it to become a member and watch Jen's 2 videos on this topic. She goes into detail/very informative as answer begins with: "It depends."
Has anyone been able to buy via eTrade? I haven’t been able to see the new 21 day CMB on my ETrade account for the past few days and today 5/23 is the auction date
I checked all weekend & it didn’t show up. It seems they only carry the longer-dated maturity CMBs.
@@DiamondNestEgg I see it there now
Thanks - it is there now. $5K minimum.
@@DiamondNestEgg They JUST updated on eTrade and the 21-day CMB is now available. I went ahead and jumped in.. it was not an option earlier this morning, so this was newly enabled in the last hour or so
Honestly, Im concerned about the ability of the U.S. Government's ability to avoid the potential Debt Ceiling crisis.
Yellen is running up the debt as fast as she can by issuing CMB's.
not sure, is this a recommendation to buy cmbs?
No.
No. “Everyones financial journey is different” per her prominent disclaimers. It’s education on a topic requested by her viewers :)
❤ ya lots.
Does it matter if there is a dollar crash? I mean, who cares what Venezuelan bonds are paying.... are you gonna buy any???
No thx default fears kick in you lose everything.
This debt ceiling "debate" feels like "fool me... once, twice, three times..." At this point reacting to it seems like a waste of energy...
1 day CMB. That is funny...........
I feel discriminated against as a Schwab account holder. 😢
As a TDA account holder (soon to be Schwab in a few months), I concur, plus Schwab’s fake T-bill rollover is obnoxious and deceptive.
It appears the administration is trying to reach the debt limit sooner rather than later.
Yes, they’re refusing to reign in spending and their media allies paint this intransigence as the fault of the Republicans.
Thank you 🙏 for sharing the wealth of wisdom !
How safe are they, is it another one of FOMO
or one of these pump and dumps of s talk market 📈 📉
From 52 weak low, to stratosphere, to BBBY
PLEASE… Discussing some safety issues
Mrs. Jennifer, thank you
As central bankers are cornered and thinking of next SNAFU and financial engineering !
🎓🎓PG 🦅192🎰🎱+ VIX