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Old 11-28-2023, 12:55 PM   #2121
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Thanks jldavid47. Looks like the curve on CDs is getting even more inverted and that the peak for longer-duration CDs has passed.
I don't know if the peak is passed or if this is just a correction before the next move up in rates (like in March and April of this year). I'm just reporting on what is happening.
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Old 11-28-2023, 01:25 PM   #2122
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Hopefully the next Fed meeting talking points in a few weeks, will give us a good idea of where rates are heading. Maybe.
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Old 11-28-2023, 04:09 PM   #2123
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Lets pray that fed is not done hiking and hikes continuously next few meetings.
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Old 11-28-2023, 04:14 PM   #2124
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I'm guessing one more is possible in the next few meetings and that's a big maybe at this point. Cut's to start by mid summer I'm guessing. (Election year)
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Old 11-28-2023, 04:28 PM   #2125
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I'm thinking they're done ...
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Old 11-28-2023, 08:39 PM   #2126
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Lets pray that fed is not done hiking and hikes continuously next few meetings.

Wishful thinking I'm afraid. A couple of the big names in finance such as BofA just yesterday announced that the June Fed meeting might be the first of several rate cuts. Unfortunately I tend to agree, especially with it being an election year.
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Old 11-29-2023, 05:12 AM   #2127
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Wishful thinking I'm afraid. A couple of the big names in finance such as BofA just yesterday announced that the June Fed meeting might be the first of several rate cuts. Unfortunately I tend to agree, especially with it being an election year.
I see cuts as a good thing. Bonds and stocks grow in value. Hopefully most of us extended maturities earlier.

I guess for folks who are mostly bonds it feels a bit like winter coming but having a more valuable bond portfolio seems a good thing all considered.
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Old 11-29-2023, 05:25 AM   #2128
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No way.

I would much rather see yields settle in around the current level and the war on savers end. If the real yield on 5 year CDs could settle in around 2-3%... so 4-5% nominal given the Fed's 2% inflation target that would be fine.

The low interest rates of the last 10 years were a ridiculous gift to corporate America.
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Old 11-29-2023, 05:35 AM   #2129
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No way.

I would much rather see yields settle in around the current level and the war on savers end. If the real yield on 5 year CDs could settle in around 2-3%... so 4-5% nominal given the Fed's 2% inflation target that would be fine.

The low interest rates of the last 10 years were a ridiculous gift to corporate America.
Well I see no reason for them to cut to zero now but the Fed never once hiked rates and then failed to cut. This is just the normal shape of the economic cycle.

And of course the "war on savers" kept the economy afloat and goosed equity returns for all of us which gave you a larger nestegg to go all bonds.
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Old 11-29-2023, 05:47 AM   #2130
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I'm ok with some modest cuts but I fear that Wall Street and corporate America are greedy and will pressure the Fed to go back to zero and the Fed may cave.

And yes, I personally benefitted from the low rates but realistically there was no other option with such low real rates.
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Old 11-29-2023, 05:58 AM   #2131
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I'm ok with some modest cuts but I fear that Wall Street and corporate America are greedy and will pressure the Fed to go back to zero and the Fed may cave.

And yes, I personally benefitted from the low rates but realistically there was no other option with such low real rates.
Well they did not cut to zero because "Wall Street and corporate America are greedy". It was that great financial crisis thingy.

And I agree Fed kept rates too low too long. But that was due to poor judgement, not pressure from business.

Not saying Wall Street is not greedy. Then again everyone wants to earn all they can don't they?
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Old 11-29-2023, 07:22 AM   #2132
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I'm ok with some modest cuts but I fear that Wall Street and corporate America are greedy and will pressure the Fed to go back to zero and the Fed may cave.

And yes, I personally benefitted from the low rates but realistically there was no other option with such low real rates.
It may be time again to start moving some cash into the preferreds that have been brought down near their issue price.
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Old 11-29-2023, 07:31 AM   #2133
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It may be time again to start moving some cash into the preferreds that have been brought down near their issue price.
Can you please give me your top two preferred? TY
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Old 11-29-2023, 08:00 AM   #2134
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All my remaining (12) CD's mature in 2024 pretty evenly spread thru the year. So far "this year" I've been sticking money from maturing CD's into SWVXX waiting to see what rates do. Heck SWVXX is still paying 5.25, so that's not bad, but I suspect that may start to drop soon. I'm also beginning to feel like we have peaked out in CD rates too. As I've said before, if I can get another few years of rates like they are now, I'll be happy.

So I'll be anxiously awaiting Powell's comments in a few weeks to decide if it is time to go all in now (again) or risk waiting a little longer. I'm beginning to think chasing a 1/4 to 1/2 point just ain't worth it. FOMO.

So I don't like buying 3+ year CD's (I like shorter terms) but I may buy some this time. Of course I can go all in now with my SWVXX dry powder at pretty good rates and rebuild my cash reserves next year as my 2024 CD's mature. Decisions, decision, decisions.
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Old 11-29-2023, 08:17 AM   #2135
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Can you please give me your top two preferred? TY
I have not looked closely at preferreds since I sold all them off around the time interest rates started to climb in early 2022 or was it late 2021. I was capturing capital gains with those sales.

There is a thread here started by user MUlligan that is all about preferreds. Maybe take a peek at that.

Look at preferreds that have a cumulative dividend payment feature and are from great companies as a starter.
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Old 11-29-2023, 08:35 AM   #2136
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It may be time again to start moving some cash into the preferreds that have been brought down near their issue price.
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Can you please give me your top two preferred? TY
I agree aja and have been tiptoeing back into variable rate preferreds trying to pick them up for $25 plus accrued dividend or less.

Current favorites are:
  • Reinsurance Group of America RZC 6.71% yield BBB+
  • Athene ATH/PRE 7.71% yield BBB
  • Allstate ALL/PRB 8.74% yield BBB-
  • MetLife MET/PRA 6.79% yield BBB-
  • Citigroup C/PRJ 9.43% yield BB+
  • Jackson Financial JXN/PRA 7.88% yield BB+
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Old 11-29-2023, 09:43 AM   #2137
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No way.

I would much rather see yields settle in around the current level and the war on savers end. If the real yield on 5 year CDs could settle in around 2-3%... so 4-5% nominal given the Fed's 2% inflation target that would be fine.

The low interest rates of the last 10 years were a ridiculous gift to corporate America.
+1

The above is the pretty close to the norm for most of my life. 4-5% CDs, 6-7% mortgages, and inflation in the 2-3% area.
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Old 11-29-2023, 09:51 AM   #2138
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I think it takes things like the 2008 financial crisis, deflation (which we intermittently experienced for brief periods afterwards) or a global pandemic to create emergency reactions like dropping rates to zero. Before 2008 dropping rates meant dropping the Fed Funds rate to 3%.
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Old 11-29-2023, 10:41 AM   #2139
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All my remaining (12) CD's mature in 2024 pretty evenly spread thru the year. So far "this year" I've been sticking money from maturing CD's into SWVXX waiting to see what rates do. Heck SWVXX is still paying 5.25, so that's not bad, but I suspect that may start to drop soon. I'm also beginning to feel like we have peaked out in CD rates too. As I've said before, if I can get another few years of rates like they are now, I'll be happy.

So I'll be anxiously awaiting Powell's comments in a few weeks to decide if it is time to go all in now (again) or risk waiting a little longer. I'm beginning to think chasing a 1/4 to 1/2 point just ain't worth it. FOMO.

So I don't like buying 3+ year CD's (I like shorter terms) but I may buy some this time. Of course I can go all in now with my SWVXX dry powder at pretty good rates and rebuild my cash reserves next year as my 2024 CD's mature. Decisions, decision, decisions.
This is baffling to me. I read this as arguing with yourself. If you really wish to get current rates for another few years all you have to do is extend maturities. Making a decision based on 1/4 pt change that has no direct impact on these proficts seems random. Are you averse to other fixed investments like bonds or MYGAs? You donít like 3+ yr maturities but all your CDs are <12 months. Ladder, ladder, ladder.
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Old 11-29-2023, 10:48 AM   #2140
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I agree aja and have been tiptoeing back into variable rate preferreds trying to pick them up for $25 plus accrued dividend or less.

Current favorites are:
  • Reinsurance Group of America RZC 6.71% yield BBB+
  • Athene ATH/PRE 7.71% yield BBB
  • Allstate ALL/PRB 8.74% yield BBB-
  • MetLife MET/PRA 6.79% yield BBB-
  • Citigroup C/PRJ 9.43% yield BB+
  • Jackson Financial JXN/PRA 7.88% yield BB+
How do these ratings work?
I bought a bond issued by Athene which was rated A by S&P. Is the scale different for preferreds or is the rating for the specific issue rather than the issuer?
Thanks
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