Federal Funds Rate and U.S. Treasuries

[ctrl_c]

I'm considering more fixed income in my AA. I kind of have feel for the connection between the Federal Funds Rate and bond prices. I've bought individual U.S. Treasuries and watched as their 'value' as calculated by Fidelity has decreased as the Fed continued to raise interest rates. These were short term and held to maturity so resale value was not an issue.

Here's the question: In a 3 - 5 year bond ladder would the theoretical value of any U.S. Treasuries bought today increase should be Fed lower rates in the future?

I'm trying to lock in some rates without feeling like I'd lose a ton of capital should I need to sell any bonds before maturity. Of course this plan relies on the Fed either holding or decreasing rates (break out the crystal ball now).

Thanks

 

[USGrant1962]

Fed actions only indirectly influence intermediate term rates - they only control the overnight rate, not months and years terms. The short end of the yield curve is quite inverted right now, so the Fed eventually driving short term rates down below 4% could very well have little impact on intermediate term rates.

https://www.ustreasuryyieldcurve.com/

Or as they say around here, nobody knows nuthin'.

 

[COcheesehead]

Nobody knows where rates will go, but if you are worried about losing money on that short of a duration with treasuries, I wouldn’t be concerned. You also won’t likely make a bunch on that sort of a duration if/when rates fall. There just isn’t that much tipping point in coupon or duration for it to matter.

 

[ctrl_c]

Thanks for the link. I need to understand the the fixed income side of things better. I only know that most CDs have a penalty for cashing out early. Bonds at least have a resale value