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We'll find out today if this is due to a more hawkish FED. 50 basis points instead of 25 maybe?
Barrons this morning:
...Either way investors now expect the Fed to be more hawkish.
Another inflation reading, February’s producer-price index due Tuesday, could add weight to that theory. Producer prices are expected to rise 10% year-over-year up from 9.7% in January.
The Fed meets later today ahead of its eagerly anticipated decision Wednesday, when it is expected to increase interest rates by 25 basis points. But the Fed’s forward guidance around rate hikes and Chair Jerome Powell’s tone will be the main event.
If Fed officials share the markets’ view, they could even spring a hawkish surprise with their guidance.
A Fed surprise is the last thing that the market would want at this time of a geopolitical event. I think a baby 25-bps hike will do for now with 50-bps shocker left in the reserve for later. But that is just my guess. At one time, I thought the Fed may start with 50-bps bang, but not now. The language and tone of the FOMC Statement would be important.
BTW, for "tough day/time", look at some bond CEFs.
The FED should have started rate hikes at the end of last year, if not sooner. We would be in a better inflationary position to accept a .25% hike now - or none at all this time around. I believe history will show Powell F'ed up pretty bad with his view on inflation. Transitory inflation??? WTF. Even I didn't believe that and I'm as ignorant as can be on the topic.
Usually the best time to buy any asset is when there is blood in the streets. Will it be different this time for bonds, perhaps, but I'm not investing based on that. Unless there is hyperinflation, possible but doubtful IMO based on demographics (there will come a time when yield-starved investors start looking at government paper and say wow, why do I need risky stocks). Then, those who dumped their bonds in this panic will say $hit, it was so obvious. As Yogi said, making predictions is hard, especially about the future (or something like that). Things could easily get worse before they get better, but I'm not dumping, I'm buying more opportunistically.
how does one go about buying the 2-yr treasury bonds? By the time we go to buy, they probably go down 10 bps in yield but still will be better than any CDs.
how does one go about buying the 2-yr treasury bonds? By the time we go to buy, they probably go down 10 bps in yield but still will be better than any CDs.
how does one go about buying the 2-yr treasury bonds? By the time we go to buy, they probably go down 10 bps in yield but still will be better than any CDs.
Treasury securities can be bought at new-issue at Treasury Direct & major brokerages (Fidelity, Schwab, etc; commission-free). Treasury publishes general schedules well ahead and makes specific announcements a few days before the new issue. They can also be bought in the secondary market at brokerages.
The Fed lag is a bit hard to look past … with CPI now at 7.9%.
“I daresay you haven’t had much practice. Why, sometimes I’ve believed as many as six impossible things before breakfast.”
The Queen, Alice’s Adventures in Wonderland - Lewis Carroll
Gives you an idea how long we’ve been (or had been) in this Alice in Wonderlandbond bull market. In Paul Volcker’s day it was acceptable for public officials to use tobacco products openly.
Comments
PTIAX -.16 cents
PRFRX -.04
PRSNX -.06
RPSIX -.07
TUHYX -.08
CEMB -.19
EMB -.20
EDD -.07
PREMX -.04
FNMIX -.04
AGEPX +.02. surprise. Frontier Mkt. bonds.
Otherwise, today continued retraction wide spread.
AGG -1.0%
BOND -0.7%
TLT -2.3%
HYG -1.2%
JNK -1.1%
In what direction did you throw that money, if I may ask? Or are you growing cash?
Barrons this morning:
BTW, for "tough day/time", look at some bond CEFs.
Things look better today!
Today the yield on 2 and 10 year treasuries went down a bit today after the 10 Y went over 2.0% on Monday.
Fed meets on Wednesday, March 16th and will decide to hike the rate 0.25% or 0.50%.
High by recent standards.
+1 @Charles Thanks for reposting that photo. The 3 riders: “Stocks”, “Bonds” and “Commodities”.
I know you can do latter through TreasuryDirect, as well as broker.
Examples:
Dish, B- (hmmm), 1 year, 5%
Ford, BB+, 1 year, callable (lol), 3.7%
Alibaba, A+, 1 year, 3%
US TBill, 1 year, 1.5%
OJ
@JohnN - Thoughts?
https://community.morningstar.com/s/feed/0D53o00005E8ZAtCAN
Will yield curve flattening follow by “inversion” ?
The Queen, Alice’s Adventures in Wonderland - Lewis Carroll
Gives you an idea how long we’ve been (or had been) in this
Alice in Wonderlandbond bull market. In Paul Volcker’s day it was acceptable for public officials to use tobacco products openly.General Schedule for T-Bills, T-Notes, T-Bonds, https://www.treasury.gov/resource-center/data-chart-center/quarterly-refunding/Documents/auctions.pdf
Upcoming 52-Wk T-Bills, for Tuesday 3/22/22, https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/A_20220317_4.pdf