Treasury Bills, Notes, and Bonds Discussion

[Chuckanut]

If short term rates have peaked, at least the worst is over for bond funds - not that I’m anxious to put money there yet.

I am hanging on to my PSSSSST…. Wellesley fund for just that reason. I doubt if it will go down much if any more. And if the interest rates are lowered next year it may see a jump up. It’s not a big part of my total or even income portion of my investments, so if I guess wrong I won’t lose the family farm.

If it goes up I may sell Wellesley and Blow that Dough on something fun in order to simplify things for my heirs. No point in complicating their lives when I can go SKIing (Spending the Kids Inheritance) and help them out.

 

[audreyh1]

The bond fund appreciation has already started. Rallying strongly since mid-October.

 

[aja8888]

The bond fund appreciation has already started. Rallying strongly since mid-October.

Yes, that ship sailed in October, but there still may be some gains to capitalize on as rates go lower next year sometime. But with the FED signaling future rate cuts, it's safer now to buy into bond funds.

 

[audreyh1]

Oh, I expect more appreciation overall over the next two years unless inflation runs away again and the Fed goes back into fire fighting mode. Faster if there is a recession causing deeper cuts.

 

[Midpack]

Yes, that ship sailed in October, but there still may be some gains to capitalize on as rates go lower next year sometime. But with the FED signaling future rate cuts, it's safer now to buy into bond funds.

That's what I meant. I'm staying with Treasuries for the foreseeable future, but buying bond funds now isn't likely to be a bad decision. Yields have been reliable all along, but the hit to NAVs is basically over if the Fed is done with rate hikes.

 

[audreyh1]

This weeks’s T-bill Auction Results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912797JA6	12/26/2023	5.265%	5.375%	$99.590500
8-Week	No	912797JE8	12/26/2023	5.270%	5.402%	$99.180222
13-Week	No	912797LL9	12/21/2023	5.260%	5.420%	$98.670389
17-Week	No	912797JP3	12/26/2023	5.220%	5.400%	$98.274500
26-Week	No	912796ZW2	12/21/2023	5.130%	5.354%	$97.406500

As you can see the 26-week dropped well under 5.4% this week. The 13-week is the highest T-bill rate these days, and that is just above 5.4%.

 

[foxfirev5]

With recent developments I'm just hoping for 1.5% real on the January 10 year TIPS auction. I was able to load up on 2+% TIPS this fall but limited by my rolling ladders. Live and die by the ladder. Oh well, I guess it will all average out.

 

[tulak]

With recent developments I'm just hoping for 1.5% real on the January 10 year TIPS auction. I was able to load up on 2+% TIPS this fall but limited by my rolling ladders. Live and die by the ladder. Oh well, I guess it will all average out.

Same. I suspected that rates would drop, even though I was hoping to get around 2% real.

My problem is that I need to cover years 2035-2037. I already stocked up on TIPS expiring in 2033 to cover 2033/2034. I thought about it for 2035, but decided to wait until January’s auction. For the January auction, I might buy enough to cover 2035 and 2036.

 

[foxfirev5]

Likewise I've increased my purchases of TIPS to cover some of the gap years. I don't really want to go to the longer maturities with hefty inflation adjustments baked into the price. I'm only comfortable out to about 15 years so I'll pile up the 10 years and hope for the best. Either trade up or wait for them to mature depending on the market.

 

[jim584672]

Today's auction.

13-week 5.420%
26-week 5.301%
52-week 4.841%

 

[JC888]

Is there any low investment grade quality bond ETF long duration to recommend with good performance when bond yield drop?

 

[audreyh1]

You probably want to ask on one of the Fixed Income threads because this one is strictly US Treasuries.

 

[audreyh1]

This week's T-bill Auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912797JB4	01/02/2024	5.325%	5.436%	$99.585833
8-Week	No	912797JF5	01/02/2024	5.285%	5.418%	$99.177889
13-Week	No	912797GY7	12/28/2023	5.260%	5.420%	$98.670389
17-Week	No	912797JQ1	01/02/2024	5.210%	5.390%	$98.277806
26-Week	No	912796Y45	12/28/2023	5.080%	5.301%	$97.431778
52-Week	No	912796ZV4	12/28/2023	4.595%	4.841%	$95.353944

Longer durations have been dropping. 13-week had been the pivot for a few weeks now and hasn't dropped for 3 weeks, but looks like 4-week crossed over.


Treasury Notes Auction December Results:

Notes	Reopening	CUSIP	Issue Date	High Yield	Interest Rate	Price per $100
2-Year	No	91282CJS1	01/02/2024	4.314%	4.250%	$99.878444
3-Year	No	91282CJP7	12/15/2023	4.490%	4.375%	$99.680564
5-Year	No	91282CJR3	01/02/2024	3.801%	3.750%	$99.769595
7-Year	No	91282CJQ5	01/02/2024	3.859%	3.750%	$99.336988
10-Year	Yes	91282CJJ1	12/15/2023	4.296%	4.500%	$101.626935

There are more if you want to look, press the Auction Results tab: https://www.treasurydirect.gov/auctions/upcoming/

 

[audreyh1]

I'd like to start a new Treasury Bills, Notes, and Bonds Discussion 2024+ thread for starting Jan 2024. This one is past 2500 posts. Can be linked back.

 

[Gumby]

That would be a great idea. Start a new one and I will close this one with a link.

 

[audreyh1]

OK - on Jan 1?

 

[Gumby]

OK - on Jan 1?

That would be perfect.

 

[Gumby]

Thread is closed due to size. New thread on the same topic is here. https://www.early-retirement.org/fo...notes-and-bonds-discussion-2024-a-120449.html