Treasury Yield Curve - June 3 2019

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moda0306
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Treasury Yield Curve - June 3 2019

Post by moda0306 » Tue Jun 04, 2019 4:37 pm

Anybody noticing the "U Shaped" yield curve?

https://www.treasury.gov/resource-cente ... data=yield

The long and short ends of the curve are the best, with the middle dipping in the lowest around the 3 year mark.

Just thought it was interesting... closest thing we've seen to an inverted yield curve in over a decade, if I'm not mistaken.
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Re: Treasury Yield Curve - June 3 2019

Post by pmward » Tue Jun 04, 2019 4:41 pm

Every time I look at yields the last few weeks, I can't help but think "wow, that escalated quickly". Bond markets seem completely sold on the fact that we are 6 months - 1 year out of a recession.
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Re: Treasury Yield Curve - June 3 2019

Post by jacksonM » Tue Jun 04, 2019 7:16 pm

Seems to me an ideal time for the PP to do well.

I don't know about the rest of you but I think I had my biggest one day gain ever today. Told my wife if we could do this every day it would be better than winning the lottery.
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Re: Treasury Yield Curve - June 3 2019

Post by moda0306 » Wed Jun 05, 2019 9:52 am

pmward wrote:
Tue Jun 04, 2019 4:41 pm
Every time I look at yields the last few weeks, I can't help but think "wow, that escalated quickly". Bond markets seem completely sold on the fact that we are 6 months - 1 year out of a recession.
How are you getting that timeframe? If rates aren't really low until we get to 2-3 years into the yield curve, how do you conclude 6-12 months?

I could be totally wrong so don't interpret any amount of condescension from my post... just asking.. my bond game is a bit rusty.
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Re: Treasury Yield Curve - June 3 2019

Post by moda0306 » Wed Jun 05, 2019 9:55 am

jacksonM wrote:
Tue Jun 04, 2019 7:16 pm
Seems to me an ideal time for the PP to do well.

I don't know about the rest of you but I think I had my biggest one day gain ever today. Told my wife if we could do this every day it would be better than winning the lottery.
Bonds and Gold have done ridiculously well (as has the PP) the last 6 months. Add to that stocks not seeming like a valuable asset class, and I'll just be buying up SHV (correction from SHY) as I save in my buckets. I might even sell some of the lower-yield mid-duration ETF positions I have (3-year-to-10-year) in favor of a barbell of TLT and SHY, but not sure on that.

Still haven't graduated to buying actual bonds...
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Re: Treasury Yield Curve - June 3 2019

Post by pmward » Wed Jun 05, 2019 11:07 am

moda0306 wrote:
Wed Jun 05, 2019 9:52 am
pmward wrote:
Tue Jun 04, 2019 4:41 pm
Every time I look at yields the last few weeks, I can't help but think "wow, that escalated quickly". Bond markets seem completely sold on the fact that we are 6 months - 1 year out of a recession.
How are you getting that timeframe? If rates aren't really low until we get to 2-3 years into the yield curve, how do you conclude 6-12 months?

I could be totally wrong so don't interpret any amount of condescension from my post... just asking.. my bond game is a bit rusty.
Yeah lowest is 2-3 years out, but we start dropping quickly from 6 months to 1 year. The start of a recession is usually months before the deepest part. Starting recession in about one year, and the recession lasting about a year, is what the curve looks like to me. Though, as you alluded to, interpreting the yield curve is more art than science.
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Re: Treasury Yield Curve - June 3 2019

Post by moda0306 » Wed Jun 05, 2019 12:29 pm

I've also found it interesting that a 5 year treasury will yield me 1.9% but I can get a 5 year CD for 3%. I know hardcore PP philosophy shies away from FDIC insured accounts vs treasuries, I still can't get over when there's a nice spread between the two.
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Re: Treasury Yield Curve - June 3 2019

Post by Xan » Wed Jun 05, 2019 2:24 pm

Unless we're talking about so much money that FDIC doesn't apply, and it's money you could wait for in a potential crisis, I agree with you.
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Re: Treasury Yield Curve - June 3 2019

Post by Tortoise » Wed Jun 05, 2019 4:40 pm

Are the banks that currently offer 5-year CDs at 3% basically taking a loss on the CDs in order to hopefully attract new customers who will also sign up for lines of credit (from which the bank actually makes its money)?
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Re: Treasury Yield Curve - June 3 2019

Post by moda0306 » Wed Jun 05, 2019 6:43 pm

Tortoise wrote:
Wed Jun 05, 2019 4:40 pm
Are the banks that currently offer 5-year CDs at 3% basically taking a loss on the CDs in order to hopefully attract new customers who will also sign up for lines of credit (from which the bank actually makes its money)?
My example was Ally, which doesn’t require a new account to get that rate. But you could still be right, though I thought banks usually used savings account and 1-2 year cd rates for that kind of stuff.
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Re: Treasury Yield Curve - June 3 2019

Post by whatchamacallit » Thu Aug 15, 2019 4:51 pm

30 year (1.98) is lower rate than 1 month (2.08) today
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Re: Treasury Yield Curve - June 3 2019

Post by Smith1776 » Thu Aug 15, 2019 8:27 pm

I hate to be "that guy" that starts making market/economic predictions of any kind. The PP is about conceding that we can't accurately predict the future.

Nonetheless, just for fun, I'd opine that the next few years in the global economy will likely be incredibly tumultuous and really test the mettle of traditional portfolios. Crazy things happening with interest rates, even in nominal terms. More global debt than ever before. A crazy President. A trade war. A tired economic expansion. Cyber warfare going on in both open and clandestine ways. Russian influence in the White House.

I'm actually kind of... how shall I say it... excited to see the PP have a chance to see what it can do.
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