Your Survival Guy likes a bond ladder, and treasuries certainly need to play a role. Take a look at the treasury yield curve below and notice that rates are much more attractive for bond investors today than they have been in years.
New excitement in treasuries is coming as yields have risen and investors flee riskier assets. Matt Grossman reports for The Wall Street Journal:
Rising rates carried the yield on two-year Treasurys to 4.206% on Friday, up from 2.925% when the quarter began. That caps the two-year yield’s largest gain through a year’s first nine months since 1981. The 10-year Treasury yield has climbed at a slower rate, finishing Friday at 3.802% compared with 2.973% at the end of June.
The result has been a flood of money into long-ignored short-term government debt. In recent years, T-bills—debt that matures in a year or less—often yielded effectively nothing, mostly useful for greasing the gears of financial markets as a close substitute for cash. Instead of receiving regular interest payments, investors buy T-bills at a discount and get the full face amount at maturity.
Over the past month, funds that invest in this debt and short-term notes have added an average of $4.4 billion a week, according to Refinitiv Lipper. Apart from the early pandemic market crash, that is the fastest clip on record in data going back to 1993.
Investors have also crowded into auctions for newly issued short-term Treasurys. In each of the Treasury Department’s two-year debt sales since March, individuals have snapped up more than $600 million in notes. Before this year, individual accounts hadn’t claimed that much in an auction in more than a decade.
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E.J. Smith - Your Survival Guy
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