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WOW, ten year treasury note yields broke 5 percent today, first time since 2007. Just a couple years ago the yield was about 1.6 percent. This could be an opportunity for investors to lock in a rate for a longer period of time compared to Money Market and CDs which fluctuate with the fed funds rate but the big question is where will rates go from here and for how long. This rate is in the "historical" normal range and the last couple of decades of near near rates were unprecedented and have proven problematic. As always understand what you invest in. The principle value of a bond will fluctuate as interest rates change, going down if rates go up or increase if rates go down but if held to maturity you get your money back assuming the borrower is still solvent of course. Treasury bills/notes/bonds can be purchased in brokerage accounts or directly from the Treasury. https://www.treasurydirect.gov...marketable-security/ https://investor.vanguard.com/...types/what-is-a-bond -- bond investing --------------------------------------------------------------------------------------------------------------- 10-yr Treasury yield hits 5%, stocks at seven-month lows https://www.msn.com/en-ca/mone...nth-lows/ar-AA1iGSo0 By Amanda Cooper and Wayne Cole LONDON/SYDNEY (Reuters) - The benchmark 10-year Treasury yield rose above 5% and to its highest since 2007 on Monday, as a roaring U.S. economy led investors to expect interest rates to stay high for an extended period. The combination of those higher yields and risk of a wider conflict in the Middle East soured sentiment at the start of a week full of mega-cap earnings and key data, and pushed global shares down to seven-month lows. he 10-year Treasury yield reached 5.012%, and was last up 8.6 basis points on the day, the latest sign of the scale of the global bond sell off, driven also by rising government debt increasing supply of bonds around the world. [US/] "5% from an economic perspective is just another number. But as far as investors are concerned it resonates," Daiwa Capital chief economist Chris Scicluna said. "I don’t think it's a tipping point, but it's a reminder of the record tightening we've had and it's a reminder, as far as the Fed is concerned, that they can't be entirely sure quite how much of that tightening so far has already been transmitted to the real economy and how much more is to come," he said. The recent surge in bond yields has tightened monetary conditions without the central banks having to do anything, allowing the Federal Reserve to signal it will likely stay on hold at its policy meeting next week. Indeed, futures imply around a 70% chance the Fed is done with tightening for this cycle and are flirting with the chance of rate cuts from May next year. ...... more at link above. | ||
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Serenity now! |
Yup - AKA no one wants our debt.. ------------------------------------------------ 9/11/01 Never Forget "In valor there is hope" - Tacitus | |||
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Yeah, I was just checking CD rates at Schwab. 5.5% for a 18-month ...let him who has no sword sell his robe and buy one. Luke 22:35-36 NAV "Behold, I send you out as sheep in the midst of wolves; so be shrewd as serpents and innocent as doves." Matthew 10:16 NASV | |||
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No More Mr. Nice Guy |
Ten years is too long for me to lock up money at only 5%. The value of the bond could drop very substantially if interest rates go even higher, so one would have to buy into such a bond with the expectation of not needing the money for 10 years. We do have a significant amount of our portfolio in a bond ladder of 3, 6, and 12 month federal t-bills at about 5%. The stock market is so treacherous right now that I am very happy to lock in the 5% while keeping fairly quick access to the money. | |||
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Agree - I've been buying 3 and 6 month treasuries in the 5.00+ range. Our bank CD rates are just a bit over 5.00. also. I'm sorry if I hurt you feelings when I called you stupid - I thought you already knew - Unknown ................................... When you have no future, you live in the past. " Sycamore Row" by John Grisham | |||
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Serenity now! |
Yup - I have been laddering 3 month Treasuries.. ------------------------------------------------ 9/11/01 Never Forget "In valor there is hope" - Tacitus | |||
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AS a matter of fact, I purchased a 2 yr. CD from Schwab this very morning......I had a much lower CD come due today. | |||
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Remarks like this cause me to wonder if they have any idea what they are talking about. | |||
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Absolutely and I stated that. However some may still want to take the opportunity to lock in the rate if it works well for their goals, especially those in retirement who have seen a couple decades of dismally low rates for Money Market, CDs, and higher quality bonds. | |||
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Member |
[QUOTE]Originally posted by lkdr1989: Yeah, I was just checking CD rates at Schwab. 5.5% for a 18-month ----------------------------------------------------- Interesting that CD rates are barely above Money Market these days unless they have a callable provision. My Vanguard Money market us at about 5.4 right now. | |||
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Most of 2020 was sub 1% for the 10 year The money market fund at Schwab is 5.25 and I’ve been juicing the yield on cash by getting 30 day Cd’s around 5.4-5.5 | |||
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Lawyers, Guns and Money |
Debt, Currency Debasement, & War - The Timeless Pillars Of Failure Tuesday, Oct 24, 2023 Authored by Matthew Piepenburg via GoldSwitzerland.com https://www.zerohedge.com/mark...less-pillars-failure "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." -- Justice Janice Rogers Brown "The United States government is the largest criminal enterprise on earth." -rduckwor | |||
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Serenity now! |
Thank you for sharing.. ------------------------------------------------ 9/11/01 Never Forget "In valor there is hope" - Tacitus | |||
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Shall Not Be Infringed |
The 7-day AND 30-day yield(s) of the Fidelity Govenrment Money Market Fund (SPAXX) is 4.99%...No need to tie your money up for ANY specific term to get such returns! ____________________________________________________________ If Some is Good, and More is Better.....then Too Much, is Just Enough !! Trump 2024....Make America Great Again! "May Almighty God bless the United States of America" - parabellum 7/26/20 Live Free or Die! | |||
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Unless one might want that rate locked in for 10 years. No one knows what money market funds will be three month, a year, five years, etc from now. Yield curve has been inverted for quite a while now and it will be interesting to see how things shake out down the road. | |||
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Shall Not Be Infringed |
That's true, but my point is that, based on the current market situation, why would anyone want 'lock in' ANY RATE at all. The rates are VERY likely to continue rising, and that return is essentially the same as the 10-yr Treasury yield, AND it is similarly, VERY likely to mirror that trend. If there were ANY changes to the downside, you're not locked into anything...If you want/need out, you get out now, and have those funds available to do something else with the next day. Nobody I know, especially me, is thinking 'it will be interesting to see how things shake out down the road' when it comes to investing hard earned money, especially money intended for retirement. Based on fed policy and the out of control .gov spending that has resulted in this potentially unprecedented era of high interest rates, I don't know why ANYONE would want to invest in a 10-yr Treasury! ____________________________________________________________ If Some is Good, and More is Better.....then Too Much, is Just Enough !! Trump 2024....Make America Great Again! "May Almighty God bless the United States of America" - parabellum 7/26/20 Live Free or Die! | |||
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I remember the Carter years. I had CD’s back then that paid almost 17%. | |||
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186,000 miles per second. It's the law. |
Dont forget the greatest bond market buy of all time was in 1981 when you could have locked in 15% for 30 years on treasury bonds. But almost nobody did since short term rates were 16-18%. | |||
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