Treasury Bills, Notes, and Bonds Discussion 2024+

[JoeWras]

There is a lot of activity in auctions coming up next week, available on your brokerage dashboard.

Aside of the regular very short term, there are:

1. 52wk Bill
2. 3ry Note
3. 10yr Note
4. 30yr Bond

I'm not making recommendations in this falling yield market. Just saying they are coming up.

I'm laddering, but I don't ladder out to 10 or 30.

All FYI for your consideration. A lot of us do secondary which is fine.

 

[joesxm3]

I buy 26 week every week. A month or two ago I cut back on my amount by 33% and started buying 52 week once a month at 66% the size of my previous 26 week buys.

Not sure what to do with the excess that will slowly accumulate. I might shift some into equities.

This is all in a traditional IRA.

Monday is the 8th anniversary of stopping w#rk. I had an oversized cash position so my annual spending was sort of like increasing my equity percentage. I recently realized that between spending and shifting into TBills I have run low on cash.

I sold a couple 0% real interest IBonds to cover property taxes and have been dipping into the money under my mattress for groceries. If I make it to January, I can make some adjustments without messing up the 2024 tax planning. I may have to sell some equities in taxable and buy them in the IRA to get some cash depending on the tax hit. I could also sell some of my older IBonds which will kill me tax wise in 2030, 2031 and 2032. But they have juicy interest rates so it pains me to sell early.

No question. Sorry for taking up your time if you read all of this.

 

[audreyh1]

I was off for a couple of months traveling. Interest rates really dropped across the board during that time!

Just some fun screenshots from my CNBC app that illustrate the recent rate drop. I’m usually looking at the 6 month view.

 

[Montecfo]

Well the question "why extend maturities when I can get 5.x% in my MM account" has been answered rather resoundingly.

 

[jazz4cash]

Well the question "why extend maturities when I can get 5.x% in my MM account" has been answered rather resoundingly.

Waiting for the other shoe “How come my MM only pays 3.xx%” or maybe even 2.xx%.

 

[Fermion]

Hmm, so I have $450,000 in a 2 year Treasury (4.7%) coming due this Sept 30. This is in the fund we tap off for 72t so I kind of want it stable (ish). Bust it now and grab another 2 year or wait to expiry?

 

[jazz4cash]

^ I see 2 yr treas ~ 3.9% right now. I think they’ll get back over 4% for a bit. I always like to hedge these things so I’d prolly sell at least half, but I might move some into CDs or ??. I’ve stuck to 5-6 yr maturities mostly with just enough shorter term paper to pay major bills like property taxes

 

[audreyh1]

Wow! Due to the weak employment numbers, huge drops in rates yesterday across the board except for the very shortest. 6 month T-bill is now around 4.84%!

 

[Fermion]

That is a rather big drop, I wonder if it will recover quite a bit. That is a 8.5% drop in less than a month.

 

[audreyh1]

It will be interesting to see if rates settles down next week. But honestly I don’t expect a big rebound.

More like this week is “last call”?

 

[ziggy29]

It will be interesting to see if rates settles down next week. But honestly I don’t expect a big rebound.

More like this week is “last call”?

It feels like the Fed was behind the curve. Powell said they were waiting for more data three days ago, and IMO they got it big time. If I personally wanted to lock in higher rates, I'd do it now.

 

[Gumby]

I've got $43k of Treasuries maturing this coming Thursday that I plan on rolling into new Treasuries. As Maxwell Smart would say, "missed it by that much!"

 

[joesxm3]

I just cancelled my orders for 26 and 52 week T-Bills this week.

I have about 1.5% available cash and this will bring it up to 2.5%.

I have only 35% equities, mostly high volatility names like TSLA and PLTR. I had planned to keep a weekly roll of T-Bills so I would be able to shift to equities at some point. So I will have a weekly cash flow if I want to DCA into equities.

I suppose I could learn how to sell T-Bills on the secondary market if I want to buy more equities than I have cash for.

 

[jldavid47]

I've got $43k of Treasuries maturing this coming Thursday that I plan on rolling into new Treasuries. As Maxwell Smart would say, "missed it by that much!"

I have $10K maturing on Thursday and am rolling into another 26 week. Whatever I get, I get.

The price action in the government bond market since Thursday has all the markings of a "flight to quality" trade given the pasting the stock market has taken since Thursday AM. Institutions selling stock have to put the money somewhere and they can't keep it in cash so they buy Treasuries. In massive quantities. That depresses interest rates in the Treasury market. Whether this is a permanent reset at these levels or not remains to be seen but I would expect a bounce in interest rates sometime this week. However, nothing in the bond market will stabilize until the stock market stabilizes.

 

[audreyh1]

Wow it’s a real bloodbath out there in equities this morning! I’m thinking some poorly hedged traders got caught leaning the wrong way and had to bail. That’s usually what causes extreme short-term volatility. It’s been a long time since I’ve seen the Dow down more than a thousand points in a couple of hours, but of course these days with such high levels that means just down ~2.5%.

 

[Markola]

Thank you, much-derided Bond Index Funds.

 

[Chuckanut]

According to TipsWatch, all TIPS regardless of their maturity time now have a real yield under 2%. The best are the 30 year TIPS at 1.99% real yield.

 

[audreyh1]

My TIPS definitely had appreciated at the end of last month. I bet they look even better today.

 

[jim584672]

42 day Bill 5.376% at auction yesterday. I guess too short a maturity to drop too much.

 

[Chuckanut]

The three year t-bill is now solidly under 4% at 3.8%.

 

[audreyh1]

This week’s T-bill auction results:

Bills CMB CUSIP Issue Date High Rate Investment Rate Price per $100 4-Week No 912797LG0 08/13/2024 5.285% 5.381% $99.588944 8-Week No 912797LS4 08/13/2024 5.190% 5.305% $99.192667 13-Week No 912797LC9 08/08/2024 5.075% 5.212% $98.717153 17-Week No 912797MN4 08/13/2024 4.990% 5.144% $98.350528 26-Week No 912797MJ3 08/08/2024 4.700% 4.881% $97.623889 52-Week No 912797MG9 08/08/2024 4.255% 4.458% $95.697722

Dramatic week for rate drops! Although I noticed rates creeping up during the week after Monday’s big bond rally. Still not at last week’s levels and that may be the last of those higher rates.

 

[Bruno]

I have cancelled Auto Roll on all my Tbills.

 

[audreyh1]

I have cancelled Auto Roll on all my Tbills.

I haven’t. They are still beating short-term CDs in most cases. I know rates are going to drop and I’m OK with rolling down for a while. MMFs will go down too.

 

[joesxm3]

Wow. That is quite a drop on the 26 week. I skipped this week to raise some cash to buy equities. But I have a large T-bill in the estate account coming due soon.

I don't plan on distributing until January, but I think I will stick to 4 or 8 week for that money. Even if the rate goes down it will handily beat the 0.5% TD Bank wanted to pay.

 

[audreyh1]

Wow. That is quite a drop on the 26 week. I skipped this week to raise some cash to buy equities. But I have a large T-bill in the estate account coming due soon.

I don't plan on distributing until January, but I think I will stick to 4 or 8 week for that money. Even if the rate goes down it will handily beat the 0.5% TD Bank wanted to pay.

The 26 week T-bill has recovered almost to 5% over the rest of this week, so Monday will probably show a much higher rate at auction.