Will Treasury Note and Bond Yields Go Higher?
Вставка
- Опубліковано 21 вер 2024
- See how the White House 2025 budget proposal, the Treasury auctions, and PPI/CPI should drive Treasury Bond and Treasury Note yields higher.
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-All of the content found in this video is for ENTERTAINMENT purposes only. We are NOT financial advisors and are not responsible for any losses in your personal investing experience.
This video was very timely! I have some treasuries maturing end of March and April, and I'm pondering how to reinvest those monies.
Both of those treasuries are around 5%, and I'm looking at extending duration out next time to around 4 - 5 years, but those YTM are around 4.3% currently. Hopefully we'll see yields go a little higher in the next 30 - 45 days. I'm 67 and recently retired, so I'm keeping the fixed income of my portfolio very conservative; investing that only in treasuries and (brokered, non-callable) CDs.
I have a similar expectation and will continue to hold funds in a 5.25 mm fund awaiting 6 percent yield on 5, 7 or 10 year T notes or bonds. Happy St. Patty's Day to all.
I’m with you
Ditto here as well. Good advise.
I don't think we will breach the 6% on the 10 years without a major credit crush that the fed won't be able to monitor this time
😊
6 percent? Good luck with that. I seriously doubt that's gonna happen. 5 percent is probably as high as it will go and I don't even think that will happen. They're all around 4.3 now so even 5 is a big jump.
Thanks for your views...all excellent points and I'll be patiently waiting on the sidelines.
Thanks for your support!
Thank you. Would love to hear your analysis on I bonds. Fixed rate going up or down?
The yield curve is still inverted.
Just made an I-bond vid! Feel free to check it out. We appreciate your support!
The TNX reaching up to 4.5%. But, how long would the Fed hold back on QE if it cleared 5%??
Thank You happy St Pats🍀
Same to you!
I like the 20 year. Other rates are lower as duration increases and the 20 year is the anomaly being higher than all over the 2 year, then it drops back for the 30 year.
Yes, the 20 year is that weird anomaly. I agree that is a good choice (if one is willing to give the govt their money for that long)
US debt is risky to purchase, unless you compare it to the rest of the world. I don't see yields going much higher from here. Maybe a little, no huge jump. If it starts to get out of hand the fed will just buy bonds to drive the yields down.
What happens if the Fed starts buying Treasuries again? I think they drive inflation higher by injecting all of that liquidity into the system. I think the Fed is limited when it comes to bailing out the Treasury right now.
@@FatherNSonInvesting maybe but I’ve heard all the doom talk for so long and still waiting on the catastrophe
I ladder CD's since last March 23, and have CD's maturing every month. I am probably overboard with CD's, as own 25 CD's, ranging from 4.95-5.50% Own a couple when bought 18-24 month CD's @5.40-5.50 monthly payers. All through my Fidelity 410k and IRA. Most CD's @10k each, and only a couple @25 or 30k.
The 2 MM funds where the monthly payers go are @4.96-5%. I actually have 5 CD's maturing this month, and holding on, before buying new issue CD's. Mostly under 9 month or short term are my buys as of late, and anticipating higher yields again, after watching yields track lower for a few months. IMO, inflation is not under control as corporate greed is alive and well. Crossing my fingers for 6% yields for longer terms down the road. Retired late 2022, and for my fixed income portfolio enjoying a decent return for now. IMO stocks are too pricey to take on the risk.
Glad to see others hold out for higher yields returning.
many people don't understand that when the Treasury issues long term bonds that you can buy/sell those bonds all during the maturity time span... so you could actually buy a 30yr bond that was issued 29yrs ago and it still has a year left to pay coupons... one such bond today has a coupon of 7.625% ... there are bonds that go out to 2030 with coupons of 6- 6.5% ... never understood why anyone likes CD's.... if you need the money and its tied up in a CD then you get penalized for early withdraw... with a T bill/bond you can buy them today and sell them back tomorrow and there is no early withdraw... and in most states they charge taxes on CDs at the state level and fed level.... bills/bonds taxes are at the fed level and no state taxes...
@@dixter1652 Brokerage CD's can be sold in secondary market. Most investors put money into CD's that they won't need. Of course one can just buy a 1 month CD these days at 5.30% and keep rolling it over if they want. Also perps like me have my cash stashed in a IRA, and self directed brokerage account 401k, so grows tax free, plus where I live no state tax. CD's work for some, and T bills better for others. It's good there are plenty of options for one to invest in fixed income.
I've got Taggart and Gundlach and Fleckenstein and all those guys teed up, but I listen to you first.
Appreciate the support!
New subscriber here. What duration are you personally liking?
I have a Treasury Direst account and am interested in buying NOTES. I know how to buy them but have a simple question.....HOW do you know what the interest rate will be? Do you place an order and only find out the interest rate after the auction? Or do you know the interest rate before you place an order to buy?
Good question! This video would probably be our best resource to explain how rates are determined
How Do Treasury Auctions Work? (Explained Simply)
ua-cam.com/video/CLZnbRgb79M/v-deo.html
@@FatherNSonInvesting The video did not answer the question directly. But from what I understand, a noncompetitive bidder like me places an order for a certain dollar amount for NOTES before the auction date. And the interest rate that I receive is based on the competative bidding and I do not know the rate at the time of purchase. In plain words, I would buy notes blindly with no idea what interest rate that I get and I am essentially stuck with that rate unless I sell the note on the open market.
@@clarkkent9080 Yep that sounds about right, kind of unfortunate that that's the way it works but that's how they do it
@@FatherNSonInvesting That is fine. While I have watched many videos and read all the info from Treasury direct, I could not find anyplace where it came right out and said that clearly. Seems like an important point to make.
Yes, you never know the exact yield until after auction. Usually close to what stated, but no for sure. That's where a CD has a advantage. You know exactly the yield on the term.
I agree if you are buying individual notes. But if you in a bond fund I disagree. Every month that you do not buy shares at a DISCOUNT you are missing out on the monthly dividends reinvesting at a DISCOUNT. Remember when rates are up the share price of the bond fund will be down. When rates are down the share price will be up. Just my .02.
if your money is in a bond fund then you are paying someone else to buy/sell the bonds for you... you can do it just as easily as the fund managers do and you can make more money that way... and you get to choose how you want the funds handled.... if you buying short term bills they don't have coupons so they are always sold at a discount and the advantage is when you buy at discount you can actually buy more bills due to the discount and you just buy more when they mature... if you want you can even stager your buys and you would get paid at maturity every single week for the rest of your life...
@dixter1652 I am assuming under your scenario the dividends would be taxed each year. I'm am referring to having a portion of a bond fund in a traditional IRA where the dividends are growing tax free plus you are getting more shares. So when the bond fund share price goes up you can reallocate some of that money to other more aggressive accounts within your traditional ira. You could also use the monthly dividends to buy shares of growth stocks when their prices are down. Bottom line is money that you do not have to allocate from your regular paycheck.
Been waiting for your outlook as to how I want to think mty strategy.
You say you would wait to buy the 10 yr old- would you wait for the 2 yr as well?
I personally think the 10 year rate will be going higher, mostly based on the surging debt, the growing concern about that debt, and that investors will demand more from the government to finance that debt. So I personally am waiting on the 10 year. Not sure about the 2 year note.
Thank you for your time and efforts
My pleasure!
@@FatherNSonInvesting I have a question that I hope you can help me with. As I am not a US resident, I am unable to buy Tbills directly from the US Treasury. Instead, I purchase Tbills through brokerages. My concern is what would happen to my Tbills in the event of the brokerage's insolvency. I understand that most brokerages, such as Interactive Brokers, are insured, but in the unfortunate event of insolvency, how long would it take to receive my Tbills, if at all?
In cryptocurrency, we can use our own cold wallet, and in the past, people had their Tbills as physical paper in their hands. For US citizens, it is quite secure because they deal directly with the US Treasury. It seems to me that we, as foreign retail investors, have the risk if a brokerage goes insolvent. It could take years until you get your bills back, or am I missing something? It would be great if you could provide some advice for foreign investors to take more secure steps to avoid something like what happened with FTX.
Thank you very much.
Thank you again.
Thank you too!
Thank You
Thank you for watching!