2-year Treasury Note yield

[Anonymous No.52928831]

The Federal Reserve says they'll raise the fed funds rate to 5.1% by the end of 2023 and then keep it there for some time, but the 2-year Note is only yielding 4.17% as of this past Friday which doesn't reflect what the Fed says they're going to do. A minimum yield of 4.7% at this moment would seem more appropriate. Does the market think the Fed is full of shit and that they'll never set the rate that high? I'm looking to park my cash in a safe place for a couple years to weather out the storm. I'm wondering if I should instead look at shorter-term securities which are currently yielding a bit more.

[Anonymous No.52929387]

Because everybody expects us to enter a recession in 2023, at which point the Fed will lower rates back to 0.

Picrel, CD rates from a regional CU. Highest rates are for the shorter term CDs, not the 2-5 year.

[Anonymous No.52929415]

>>52928831
Based bond buyer. I bought some 17 week bonds recently and some series I back in January. Will reevaluate as rates change

[Anonymous No.52929427]

>>52929415
Should I buy a treasury bill or I bond?

[Anonymous No.52929526]

>>52929427
For the time being, rates are still higher on I-bonds so I’d go with those. But if you think inflation is going to drop precipitously, then you might want treasury bills to lock in the rate. I doubt it though.

[Anonymous No.52929611]

>>52929526
This might be dumb question but I thought I bonds needed to be at least 1 yr? If it is less isn't it a tbill?

[Anonymous No.52929631]

>>52928831

Listen to me very carefully: EVERYTHING that is said in the media is a lie.

everything

[Anonymous No.52929657]

>>52929427
yes. ibond first. then everything else in short term tbills. they have the higher interest rates right now.

[Anonymous No.52929668]

>>52929657
Wish I knew about them before. They have 9% interest.
Wtf!

[Anonymous No.52929676]

>>52929427
Definitely max out your I Bonds before looking into Treasuries and CDs.
>>52929611
I Bonds have a lock-up period of 1 year, so they need to be held for at least that long. T-Bills can be bought in terms of 1-month to 1-year (look at chart in the OP). If you buy through a brokerage, you can sell a T-Bill before maturity at market rate, not so if purchased through TreasuryDirect (you could transfer Treasuries from TD to a brokerage if you want to sell, but in practice this is quite difficult). You can't transfer I Bonds as they are not marketable securities.
>>52929387
>>52929415
I'm leaning towards agreement, shorter term securities (6 months or less) may be the safer bet at the moment. I already purchased a 6-month Bill a couple weeks ago at 4.74%. I want to believe that the Fed will do what they say they're going to do, but after the shit show the Bank of England put on recently, I can't be certain.

[Anonymous No.52929687]

>>52929657
>tbill higher interest rates
technically the ten year ibond is higher but you can only get two of those a year.
>up to $10,000 in electronic I bonds
and
>up to $5,000 in paper I bonds (with your tax refund)
after you have one or both of those put the rest in tbills

[Anonymous No.52929701]

>>52928831
markets are on full copium right now
interest rates aren't going anywhere until inflation starts to really ease

[Anonymous No.52929708]

>>52928831
This is somewhat pricing in what the market expects to be the average federal funds rate over that period of time.
Just because the rates might hit 5.1%, doesn't mean they'll stay there. If you think they will, put your money where your mouth is and just keep yer cash in VMFXX or something that tracks the federal funds rate.

[Anonymous No.52929715]

>>52929668
Yah. I got one a few months back when it was over 10%. They dipped a little since. 9% is great though.
btw as I posted here >>52929687
a person can buy two ibonds a year like that. If you have an LLC or whatever business the business can also buy two ibonds a year. You can do this with as many businesses as you have.

[Anonymous No.52929716]

>>52928831
Never try to apply logic to the bond market. Demand for bonds is illogical. It is a result of boomers parking their wealth while they wait to die, or certain regulation insurance companies, pensions, etc. being forced by the government to buy. Bonds will always be irrationally overvalued. They are a fucking terrible investment long term and only to be used as a temporary position to negate some of the loss to inflation while you short, waiting to buy real assets.

[Anonymous No.52929724]

>>52929676
Treasury long-term rates are pretty shit right now, but some of the online banks are offering good CD's right now

CapitalOne has a 5 year CD at 4.4% (no minimum)
Discover has 7 or 10 year CD's at 4.25% ($2500 minimum)

[Anonymous No.52929762]

>>52929708
>keep yer cash in VMFXX or something that tracks the federal funds rate.
I'm interested but why do this? Why go with VMFXX rather than do it yourself? Why not just buy tbills and ibonds personally? Won't the payout be higher that way since no fees paid to VMFXX? What is the advantage, if any with VFMXX?
Link here if anyone is interested.
https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx

[Anonymous No.52929792]

>>52929724
Short term tbills are current;y higher than those savings account rates. picrel
https://www.bankrate.com/rates/interest-rates/treasury/

[Anonymous No.52929806]

>>52929792
>savings account rates
*CD rates

[Anonymous No.52929828]

>>52929762
I suppose it's because people seem to think that the TreasuryDirect website is outdated (which it is, though it works just fine) and slow (rarely actually the case, except for the few days before the I-bond rate changed, when the site was swamped with new buyers)

[Anonymous No.52929845]

>>52929828
I read actual articles from supposed financial professionals/experts who said it wasn't worth your time to get almost a 10% return on your money because then you would have to "open a new account and keep track of it"

these people are idiots

[Anonymous No.52929858]

>>52929792
>>52929806
that's true, and i'm not saying you should necessarily rush right out and put your money into CD's instead, I'm going to watch and wait for at least a few more weeks before I start to shift from T-bills to CD's

but the moment the Fed even so much as hints that they're going to start lowering rates, tbills will start to crater, and you'll wish you had locked in long-term

[Anonymous No.52929863]

>>52929762
Treasury direct website sucks, to be honest.
also they can just decide to lock down your account and require you to get a really obscure form signed by your bank, which they never want to sign for you / never know how to do.
this happened to my dad.
Also, funds like VMFXX actually follow the overnight / federal funds rate, strictly speaking. They directly invest in reverse repos that are paid out at the actual federal funds rate with no maintenance necessary, whereas buying short-term T-bills only mostly accomplishes this.
It's splitting hairs, but I just suggested what's easiest and technically the most correct.

[Anonymous No.52929866]

>>52929828
The site works fine for me. It sets up nice. Buy straight out of savings. Get paid back automatically into savings on maturity. I don't think people realize how simple and easy it is. I guess its nerve wracking to set up and pay out a few hundred grand over the internet for some people. In person with banks or brokers people feel safer or whatever with customer service so are fine with paying a fee. There is also the pay and forget about it with VMFXX. They take care of paying attention to maximizing profits so customers don't need to.

[Anonymous No.52929878]

>>52929858
>the moment the Fed even so much as hints that they're going to start lowering rates, tbills will start to crater, and you'll wish you had locked in long-term
Good point. I was thinking that looking at the 5 year CD time frame. Double edge sword to get locked in though too if tbills keep going up.

[Anonymous No.52929889]

>>52929762
>>52929863
I should add, I do own I-bonds, but I bought when the rates first went to 7%.
To me the risk of using that website is not worth just an extra percent or two, but it was worth getting 7% or 9% when savings accounts paid 1%, for example. The annual limit means it's not enough to change my situation.
I plan to liquidate my I-bonds when savings accounts or the fed. funds rate is within 1-2% of the I bonds rate. This seems like it will be next spring or summer based on recent monthly CPI data.

[Anonymous No.52929893]

>>52929878
the best play, as always, is probably to hedge
shift a little bit of your investment budget from T-bills to CD's every couple/few weeks

and definitely don't put it all in long-term stuff, you always want to be at least a little liquid

[Anonymous No.52929917]

>>52928831
They're just factoring in uncertainty.
Remember that there's an election in 2024, and higher interest rates will lose them an election more than higher debt.

[Anonymous No.52929930]

>>52929863
>Treasury direct website sucks,
The layout to find info can be a pain. Actual setup and use is really straight forward.
>your dad's issues
Not trying to pick on him but he must have messed something up setting up. I have not heard of anyone having any issue like that.
Like I said here >>52929878 to each their own. Whatever works for whoever whatever.

[Anonymous No.52929938]

>>52928831
I've been loading some shorter dated stuff.

[Anonymous No.52929956]

>>52929930
Yeah, they required a medallion signature fucking mailed in from his bank because I guess the feds didn't have enough info stored away on him to verify the data. He's still pretty sharp so I don't know what happened.
I agree that the clunky website on its own isn't a big deal. Anyone over 85IQ can operate it. But, I have heard that they require a medallion signature FAR more often if you change your banking info on the site. So just keep this in mind, maybe don't switch bank info on treasury direct if you can avoid it.
I agree with you enough to have put in 20 grand when the rates were 7% though, just something to keep in mind.

[Anonymous No.52929978]

>>52929956
this is the one big fault with the system as set up, you gotta get a fairly obscure govt form signed (and mailed!) by the bank if you want to change banks for your account

I get that they want to cut down on fraud and mishandling, but this is just unacceptably slow for the year 2022

[Anonymous No.52929988]

>>52929978
yes, this is exactly it. it was a 12 week account lock before they could get to the form and re-open it, and that was after he got someone at the bank that actually knew what it was.

[Anonymous No.52929989]

>>52929956
>So just keep this in mind, maybe don't switch bank info on treasury direct if you can avoid it.
Will do. Thanks for the tip.

[Anonymous No.52930019]

>>52929956
>they require a medallion signature FAR more often if you change your banking info on the site
Found some info on this
https://www.treasurydirect.gov/research-center/signature-certification/
They must be worried about account theft, ugly divorces, idiots falling for fishing scams, weird stuff. Guess I'd rather have to go through a formal verification process to make sure my money is safe rather than have it stolen somehow.

[Anonymous No.52930039]

>>52930019
I'm not saying I don't understand why they do it, there's potentially so much money involved
but there's got to be a better way

[Anonymous No.52930043]

>>52930019
This is a similar form but not quite as big of a pain in the ass, lol
This is required when redeeming a large quantity of paper bonds or things like that. I almost had to do this to redeem an EE bond but it was under the threshold so I was safe. I agree that this one is not so bad.
I am specifically referring to a "medallion" signature that a bank must sign and stamp.

[Anonymous No.52930057]

>>52930019
I should say that I'm less than 100% sure since only my dad ever had to do this process. Some idiots online say it might not be needed anymore, just proceed with caution unless your bank is more competent than most.

[Anonymous No.52930060]

>>52930057
oh shit, that's a very recent change
lemme go check on that

[Anonymous No.52930075]

>>52930060
I agree, I will take it as good news but I won't go tempting fate. I also just found this out when I searched it now, they used to require a "medallion" or "signature guarantee" in every case, and banks are little faggots about giving those. Especially "due to covid" they have an excuse to be dirtbags, kek

[Anonymous No.52930081]

>>52930060
>>52930075
it's for reals
the last time I clicked on it, it popped up a screen detailing the bank form signature process as described earlier, now I get this screen

[Anonymous No.52930093]

>>52930081
Oh sweet. I personally expected they would let you enter the information, bait you, then make you back it up with the paper form.
But that was just me guessing. I obviously never tried it, and of course my dad had to do this to even open the damn account.

[Anonymous No.52930107]

>>52930081
>>52930093
I didn't enter any info, since I don't actually need to add another bank right now, so I suppose it's possible there's still an extra verification step afterwards?
but this is more than I was getting before

[Anonymous No.52930122]

>>52930107
understood, thanks for the info so we didn't have to log in and try ourselves

[Anonymous No.52930124]

Well just spent $10k on fake government money.
Here goes nothing :)

[Anonymous No.52930206]

>>52930124
I-bonds, I assume?

[Anonymous No.52931277]

>>52930107
>>52930122
Also FYI, if for some reason you still need to submit a paper form (still a possibility if TD can't verify your info during the bank change/update through the web form alone), there are other methods besides the medallion stamp that are less stringent, like a signature guarantee or paying-agent seal. It's much easier to get the bank to do one of those for you. The medallion stamp is an extreme request from the banks perspective; it's and not worth going down that route.
From TD's website:
>Acceptable seals and stamps:
>• The financial institution’s official seal or stamp, including: Signature Guaranteed seal or stamp; Endorsement Guaranteed seal or stamp; Corporate seal or stamp (a corporate resolution isn’t required); or Issuing or paying agent seal or stamp (including name, location, and four-digit identification number or nine-digit routing number).
>• The seal or stamp of Treasury-recognized Signature Guarantee Programs or other Treasury-approved Medallion Programs.