6-month treasury hits over 5%”
Thanks to aggressive rate hikes, short-dated yields have eclipsed those of longer maturities, a phenomenon known as inversion.
As of this writing and after this morning’s hotter than anticipated November jobs report please see current treasury yields with different durations:
- 1 month 4.59%
- 3 month 4.79%
- 6 month 5.02% *
- 1 year 4.95%
- 2 year 4.58%
- 10 year 3.73%
- 30 year 3.77%
Source: https://ycharts.com/
Given this dislocation and abnormality with an inverted yield curve, we’ve been very active in the 6-month treasury markets. As you can see we are getting over 125 pbs more in the 6 month than the 30 year duration bond. Keep in mind treasuries are very fluid and can be purchased or sold anytime as they are the most liquid bond instrument in the fixed income universe, with negligible chance of default. Unlike CD’s, they do not need to be held to maturity. Treasury securities are considered extremely safe investments as they are backed by the full faith and credit of the U.S. government.
We have found that many investors both individually and institutionally did not know these opportunities existed for cash and cash equivalents.
In the shadows of higher inflation there is a ray of hope for safe haven investment dollars. Let us know if we can help in this area and build a custom treasury solution for your cash and cash alternatives.
