Treasury Bills, Notes, and Bonds Discussion

[Montecfo]

I preferred last fall or in March when the mini bank crisis moved rates to 5%+.

They may fall more from here or rise, who knows?

 

[Fermion]

With inflation now running about 4%, getting 5.5% or 1.5% real return is sounding very nice for something as safe and liquid as a treasury. Me like.

 

[Midpack]

The closed thread that preceded this one saved me over $40K, thanks freedom56 (not here anymore...).

 

[Spock]

With inflation now running about 4%, getting 5.5% or 1.5% real return is sounding very nice for something as safe and liquid as a treasury. Me like.

IF your personal rate of inflation matches a heavily doctored CPI %.
Mine doesn't and me no likey.

 

[Montecfo]

With inflation now running about 4%, getting 5.5% or 1.5% real return is sounding very nice for something as safe and liquid as a treasury. Me like.

Yes. Good returns on short term instruments. The art is finding returns which will last as inflation continues to fall.

 

[Maximus]

Hello Audrey,
I bookmarked your link several months ago to follow historical pricing on tbills. I noticed today that my bookmark showed “page not found” on home.treasury.gov.
Your link here works fine. I deleted my bookmark, clicked on your link and all the data is there. I reinstated the bookmark from your link only to get the same page not found error. Any ideas on how to correct this? Thanks..

That auction price was for last week - last Thursday.

A good reference for secondary market pricing on T-Bills is this page from the US Treasury. They sample the secondary market near the end of each trading day. Coupon Equivalent is the number to use. https://home.treasury.gov/resource-..._bill_rates&field_tdr_date_value_month=202305

I also use the CNBC app to monitor secondary market on Treasuries, but the page linked above is really good enough.

The 4-week rate has come way way down since last week and is now around 5.3%

 

[audreyh1]

Who knows. This link is set to current year. https://home.treasury.gov/resource-...treasury_bill_rates&field_tdr_date_value=2023

 

[audreyh1]

The 26 week T bill fetched 5.504% today at auction. I was hoping for 5.53% but can’t complain as I rolled over a 26 week paying 4.78%. There was a small drop in rates today.

 

[jazz4cash]

The closed thread that preceded this one saved me over $40K, thanks freedom56 (not here anymore...).

There was no closed thread preceeding this one. I stated clearly why I started this thread in post #1 way back on 8/31/22. You are thinking of something else.

 

[Montecfo]

Fitch downgrades US debt. This *might* have a tendency to pressure rates.

Definitely cautionary milestone on growing US debt levels.

https://www.fitchratings.com/resear...tings - London - 01 Aug,been affirmed at 'AAA'.

 

[Spock]

Fitch downgrades US debt. This *might* have a tendency to pressure rates.

Definitely cautionary milestone on growing US debt levels.

https://www.fitchratings.com/resear...tings - London - 01 Aug,been affirmed at 'AAA'.

Secretary Yellen has been reported as being furious almost to the point of being unhinged over the downgrade.
In reading the stats comparing US debt to peers and medians within the ratings group its like why wasn't it dropped lower? The US metrics were all 2x worse than the rest of the ratings group.
The comparison was shocking.

 

[Montecfo]

I hoped you were going to say she was incensed at the deficits. These are some popping numbers. $1.39T deficit through June versus $850B same period last year.

 

[Spock]

I hoped you were going to say she was incensed at the deficits. These are some popping numbers. $1.39T deficit through June versus $850B same period last year.

Quite the contrary. She was ranting that they were reducing the deficit by $1T. Those magic mushrooms she ate in China must still be hanging in there.
https://www.zerohedge.com/economics/fitch-cuts-usas-aaa-rating-cites-fiscal-deterioration-erosion-governance

 

[Montecfo]

That is certainly a challenge.

 

[pb4uski]

Fitch downgrades US debt. This *might* have a tendency to pressure rates.

Definitely cautionary milestone on growing US debt levels.

https://www.fitchratings.com/resear...tings - London - 01 Aug,been affirmed at 'AAA'.

I think the bigger issue in the ratings downgrade is

... The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. ...

Time to get rid of the debt limit so the periodic insanity can be avoided. Spending restrat whould be done via the budget and appropriations processes, not this debt limit insanity.

Or better yet, enact a law that if Congreee fails to adopt a budget by a certain date that all Congressmen lose their jobs and new elections are held in 60 days. I bet you that if we had something like that in place that we would have regular budgets. That is what they do in Israel:

If the Knesset fails to adopt a budget, the government is considered to be in a state of "technical default." This means that the government is still able to function, but it cannot make any new spending commitments. The government must continue to operate on the basis of the previous year's budget, and it cannot raise taxes or borrow money.

If the Knesset fails to adopt a budget within 90 days of the start of the fiscal year, the government is dissolved and new elections are called. This has happened three times in Israel's history, most recently in 2022.

The consequences of a failed budget can be serious. The government may be unable to pay its bills, which could lead to a financial crisis. The government may also be unable to provide essential services, such as education and healthcare. This could have a significant impact on the lives of Israeli citizens.

In order to avoid a failed budget, the Knesset must reach a consensus on a spending plan. This can be difficult, as the Knesset is a fractious body with a wide range of political views. However, it is essential for the government to be able to function effectively, and a failed budget would be a major setback for Israel.

Here are some additional details about the consequences of a failed budget in Israel:

• The government may be unable to pay its employees, which could lead to strikes and other labor unrest.
• The government may be unable to provide essential services, such as security and infrastructure maintenance.
• The government's credit rating may be downgraded, which could make it more difficult to borrow money in the future.
• The economy may suffer, as businesses may become less confident about the future and may be reluctant to invest.

A failed budget can have a significant impact on the lives of Israeli citizens. It is therefore important for the Knesset to reach a consensus on a spending plan as soon as possible.

 

[Chuckanut]

Not updating the debt limit reminds me of a couple that borrows to spend lavishly on all sorts of goodies: vacations, furniture, fancy cars, expensive booze, big house, fancy clothes, etc. When the bills come due and they realize they over spent they then decide to change their ways and be more disciplined by not paying the debts they incurred. They certainly missed the point.

 

[d.davis]

Spending restraint whould be done via the budget and appropriations processes:

I so had to laugh at that statement. The use of word "restraint" when neither party has any interest in that.

Sent from my moto g power using Early Retirement Forum mobile app

 

[Montecfo]

Not updating the debt limit reminds me of a couple that borrows to spend lavishly on all sorts of goodies: vacations, furniture, fancy cars, expensive booze, big house, fancy clothes, etc. When the bills come due and they realize they over spent they then decide to change their ways and be more disciplined by not paying the debts they incurred. They certainly missed the point.

I understand the sentiment. But deciding to return the most lavish furniture for full credit comes closer to what occurs.

But to your point spending money you do not have is the large issue.

 

[Chuckanut]

I so had to laugh at that statement. The use of word "restraint" when neither party has any interest in that.

I agree. The lack of commitment to budget sanity bothers me a lot. The deficit hawks have seemed to go the way of the Dodo bird. For that reason, I have added a few TIPS to my collection of treasury bills, along with Ibonds.

I would love to have my doubts proven wrong.

 

[d.davis]

So it now looks like 3 drivers to push the long end up - QT, new debt being sold and credit downgrades. I think we'll stay with shorter durations for another 3-6 months in this household on the maturing stuff.
I doubt the debt downgrade is going to be a significant contributor.
I was surprised Fitch focused on the debt ceiling fight as opposed to the absolute amount of debt and it's trajectory. Which made me think about pd4's argument a little more. I think I'm now in his court but for a different reason. Those rubber stamping spending bills made it seem like the debt limit would allow spending constraint. And of course we hit the debt limit and it never results in spending constraint because they just increase the limit So let's do away with the debt cap so that fiscal restraint has to occur in spending appropriations (as pb4 suggested) so they can't use the debt limit as cover for overspending.
Then Fitch will actually have to honestly look at the debt level, and it's trajectory, when determining their ratings.


Sent from my moto g power using Early Retirement Forum mobile app

 

[madatrub]

I was curious at the previous downgrade, and thought this interesting..

The announcement was made on Aug 2, 2011. The market dropped 13% in the following 5 sessions. It had already been lower by about 5% before this announcement.

It then proceeded to run in nearly a straight line over the next 4 years, topping out 50% higher.

 

[jazz4cash]

This thread is going off the rails. The topic is investing in treasury bills, notes, and bonds.

 

[pb4uski]

Yeah, we never have threads that go off on tangents here at e-r.org.

 

[calmloki]

Not updating the debt limit reminds me of a couple that borrows to spend lavishly on all sorts of goodies: vacations, furniture, fancy cars, expensive booze, big house, fancy clothes, etc. When the bills come due and they realize they over spent they then decide to change their ways and be more disciplined by not paying the debts they incurred. ...

Now THAT is quotable! Thanks!

Stocks have been shooting up like mad for us the last several weeks - then the last two days took us all the way back to July 14. So we'll be buying another 6-month T-bill on Monday. Maybe the price will be lower than the last two weeks.

 

[audreyh1]

Yeah, we never have threads that go off on tangents here at e-r.org.

I know, high is why we have to work extra hard to keep these long running useful threads on topic.