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Post by chang on Jun 30, 2023 14:42:13 GMT
Edit: I changed the subject of this post, which was previously "6M T-bill auction ends on Monday 7/3 ..... yield 5.437%"
Matures 01/04/2024. Expected yield 5.437%.
I have some extra funds from an equity sale today. I can tie them up for a while, since I have "cash" sitting in RPHIX that can be tapped if I need it.
FZDXX is yielding 4.91%. The 6M T-bill yield is significantly better.
Anyone buying it?
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Deleted
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Post by Deleted on Jun 30, 2023 18:37:06 GMT
Yes and, in my state, it turns into ~5.6% considering tax exemption.
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Post by nobhead on Jun 30, 2023 19:17:06 GMT
I loaded my truck up last week at 5.42%. My largest ones mature in September and October which were about 4.8%. I will probably roll them over then to new ones if the rates are still good. Trying to protect capital for heirs.
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bruno
Lieutenant
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Post by bruno on Jul 1, 2023 3:21:23 GMT
I have a 50k 6mo tbill that will mature on 7/6 and called Fido to buy this one CUSIP 912797FW2 (its the 1/4/24 tbill) and setup auto roll. I was looking at a Citizen bond CUSIP 174610AK1 12/2025 with 7.45 yield but safe is better than sorry .
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Post by chang on Jul 1, 2023 9:23:17 GMT
I should have added that RPHIX, my cash "parking lot", is yielding 5.23% (30dy SEC per Fidelity). The T-bill seems hard to beat.
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Post by yogibearbull on Jul 1, 2023 10:51:41 GMT
I am still using 3-mo T-Bills. The Fed isn't done yet. But the plan is to use more ultra-ST bond funds or ST bond funds in the near future.
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Post by Fearchar on Jul 1, 2023 11:08:18 GMT
I'll be entering thru the E*Trade portal, but Vanguard indicates 5.492% while the Treasury resource center is reporting a dance between the 4 month and 6 month. Thursday 4 month 5.51% 6 month 5.50% Friday 4 month 5.50% 6 month 5.47% CME FED Futures are >85% for hike thru December Seems to me that secondary market and auction results follows the Futures. So, rates may start to tapper off when the probability of cuts draw nearer.
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Post by chang on Jul 1, 2023 11:45:11 GMT
I didn’t know there was a 4-month T-bill.
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Post by yogibearbull on Jul 1, 2023 11:52:43 GMT
Don't rely on secondary market quotes for Treasuries when the markets are closed. Those are stale quotes or just stubs/place holders. Some websites won't even allow secondary market order entries while the markets are closed. No similar problem with Treasury Auction orders.
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Post by Fearchar on Jul 1, 2023 12:01:07 GMT
Yes; 17 week auctions are relatively new. They are held weekly and just started in October of last year.
They are not held on the same days as the 13 and 26 week auctions. Next 17 week auction opens 7/3/23 and will be held on 7/5.
So, 13 week matures 10/5/23 26 week matures 1/4/24 17 week matures 11/7/23
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Post by chang on Jul 1, 2023 12:02:57 GMT
I am still using 3-mo T-Bills. The Fed isn't done yet. But the plan is to use more ultra-ST bond funds or ST bond funds in the near future. yogibearbull you wrote in your Barron’s post “beware that T-Bill rates will drop.” So do you think that rates will go up or down?
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Post by Fearchar on Jul 1, 2023 12:11:36 GMT
yogibearbull , I understand your point about the secondary market. However, I'll point out that the Treasury Resource Center states the following: These par yields are derived from indicative, bid-side market price quotations (not actual transactions) obtained by the Federal Reserve Bank of New York at or near 3:30 PM each trading day.
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Post by yogibearbull on Jul 1, 2023 12:33:06 GMT
I am still using 3-mo T-Bills. The Fed isn't done yet. But the plan is to use more ultra-ST bond funds or ST bond funds in the near future. yogibearbull you wrote in your Barron’s post “beware that T-Bill rates will drop.” So do you think that rates will go up or down? Eventually they will drop when the economy weakens and slides into a recession. But this may not happen for months. There is also a funny quote on recession from Biden in Barron's - "It's been coming on for 11 months. Well, guess what? I don't think it's going to come." That may be wishful thinking. The Fed wants to break something big before its pivot. The crises in cryptos and regional banks weren't big enough. But the Fed wants all that before the election season gets into high gear in 2024.
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Post by yogibearbull on Jul 1, 2023 12:58:14 GMT
yogibearbull , I understand your point about the secondary market. However, I'll point out that the Treasury Resource Center states the following: These par yields are derived from indicative, bid-side market price quotations (not actual transactions) obtained by the Federal Reserve Bank of New York at or near 3:30 PM each trading day. Treasury info is EOD and derived from various quotes (so not transactional). Those are fine. But I was referring to quotes from E*Trade, Vanguard, etc. During the market hours, I watch 3M ^IRX, 5Y ^FVX, 10Y ^TNX, 30Y ^TYX. At StockCharts, replace ^ with $ and note scale 10x; there are also EOD quotes $UST3M, etc.
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bruno
Lieutenant
Posts: 56
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Post by bruno on Jul 1, 2023 13:52:33 GMT
I didn’t know there was a 4-month T-bill. There are some ODD date Tbills called CMB (Cash Management Bills) .
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Post by chang on Jul 1, 2023 14:19:40 GMT
Yes; 17 week auctions are relatively new. They are held weekly and just started in October of last year. They are not held on the same days as the 13 and 26 week auctions. Next 17 week auction opens 7/3/23 and will be held on 7/5. So, 13 week matures 10/5/23 26 week matures 1/4/24 17 week matures 11/7/23 Fearchar Thanks, I should have noticed that earlier, because I do consult the schedule home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdfI will check on Monday when I should see the 3- and 4-month auctions both open (last day for the 3-, first day for the 4-). I also see that the expected yield fluctuates a bit; right now the 6M is at 5.413%. If it falls much more, it might not be a competitive option to RPHIX.
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Post by yogibearbull on Jul 1, 2023 14:35:08 GMT
I didn’t know there was a 4-month T-bill. There are some ODD date Tbills called CMB (Cash Management Bills) . Correct. But CMBs are as-needed and aren't on Treasury Auction Schedule PDF. But if you receive auction alerts from Treasury (like I do), those will be included. Subscribe Here www.treasurydirect.gov/mailing-lists/
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Post by steadyeddy on Jul 1, 2023 15:00:10 GMT
Yes; 17 week auctions are relatively new. They are held weekly and just started in October of last year. They are not held on the same days as the 13 and 26 week auctions. Next 17 week auction opens 7/3/23 and will be held on 7/5. So, 13 week matures 10/5/23 26 week matures 1/4/24 17 week matures 11/7/23 Fearchar Thanks, I should have noticed that earlier, because I do consult the schedule home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdfI will check on Monday when I should see the 3- and 4-month auctions both open (last day for the 3-, first day for the 4-). I also see that the expected yield fluctuates a bit; right now the 6M is at 5.413%. If it falls much more, it might not be a competitive option to RPHIX. All - Where do you see the expected yield? I tried looking for it on E*Trade but could not locate it.
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Post by steadyeddy on Jul 1, 2023 15:01:29 GMT
At least on E*trade I see a couple of 6 month CDs with 5.3% YTM available - which is not bad. Is there a reason to perhaps prefer T-bills?
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Post by chang on Jul 1, 2023 15:06:43 GMT
All - Where do you see the expected yield? I tried looking for it on E*Trade but could not locate it. I'm looking on the Fido page.
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Post by yogibearbull on Jul 1, 2023 15:08:30 GMT
steadyeddy, but 6-mo T-Bills are at 5.47% (EOD Friday) and much more liquid than CDs. Also, T-Bills are exempt from state/local taxes (high in some states).
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Post by steadyeddy on Jul 1, 2023 15:12:08 GMT
All - Where do you see the expected yield? I tried looking for it on E*Trade but could not locate it. I'm looking on the Fido page. chang, found it! thanks... enclosing here as info for others. In y'all's experience how close is the real yield after the auction to the expected yield shown? This would be the first time buying for me, and I am tempted to buy.
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Post by steadyeddy on Jul 1, 2023 15:14:38 GMT
steadyeddy , but 6-mo T-Bills are at 5.47% (EOD Friday) and much more liquid than CDs. Also, T-Bills are exempt from state/local taxes (high in some states). Thanks yogibearbull. This time the money I want to deploy is in an IRA, but I will remember the tax benefits for future reference.
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Post by Fearchar on Jul 1, 2023 15:44:13 GMT
Yes; 17 week auctions are relatively new. They are held weekly and just started in October of last year. They are not held on the same days as the 13 and 26 week auctions. Next 17 week auction opens 7/3/23 and will be held on 7/5. So, 13 week matures 10/5/23 26 week matures 1/4/24 17 week matures 11/7/23 Fearchar Thanks, I should have noticed that earlier, because I do consult the schedule home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdfI will check on Monday when I should see the 3- and 4-month auctions both open (last day for the 3-, first day for the 4-). I also see that the expected yield fluctuates a bit; right now the 6M is at 5.413%. If it falls much more, it might not be a competitive option to RPHIX. hmmm; among low risk funds RPHIX is unique. Also, just checked and see RPHIX is currently open to new investors thru E*Trade. I don't recall it being open in the past. Fund flows appear to have been consistently negative all last year. Could fund flows for RPHIX be a useful predictive tool? It may be worth it to start a position before their popularity returns. On the other hand, by the time the FED starts to cut, the market environment will shift and risk may come with much better premiums.
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Post by Fearchar on Jul 1, 2023 15:52:43 GMT
steadyeddy, You maybe looking at the secondary market. At E*TRADE, access to the Treasury Auction page is thru the Bonds Tool page.
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Post by chang on Jul 1, 2023 16:05:33 GMT
Fearchar I’ve been using RPHIX for quite a few years. Mainly for defense when I need a hiding place. Right now many people are getting more aggressive; and so am I — I opened a position in PIMIX earlier in the year. But I’m still playing defense, especially since MMs are paying 5%. Rightly or wrongly I treat RPHIX as a safe parking lot for cash, and its yield is competitive. Its manager posts here from time to time.
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Post by steadyeddy on Jul 1, 2023 16:30:07 GMT
Fearchar Thanks, I should have noticed that earlier, because I do consult the schedule home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdfI will check on Monday when I should see the 3- and 4-month auctions both open (last day for the 3-, first day for the 4-). I also see that the expected yield fluctuates a bit; right now the 6M is at 5.413%. If it falls much more, it might not be a competitive option to RPHIX. hmmm; among low risk funds RPHIX is unique. Also, just checked and see RPHIX is currently open to new investors thru E*Trade. I don't recall it being open in the past. Fund flows appear to have been consistently negative all last year. Could fund flows for RPHIX be a useful predictive tool? It may be worth it to start a position before their popularity returns. On the other hand, by the time the FED starts to cut, the market environment will shift and risk may come with much better premiums. Fearchar, thanks. Where does it show expected yield on e*Trade site? As chang pointed out, I know where to find the expected yield on Fidelity page.
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Post by Fearchar on Jul 1, 2023 22:08:17 GMT
hmmm; among low risk funds RPHIX is unique. Also, just checked and see RPHIX is currently open to new investors thru E*Trade. I don't recall it being open in the past. Fund flows appear to have been consistently negative all last year. Could fund flows for RPHIX be a useful predictive tool? It may be worth it to start a position before their popularity returns. On the other hand, by the time the FED starts to cut, the market environment will shift and risk may come with much better premiums. Fearchar , thanks. Where does it show expected yield on e*Trade site? As chang pointed out, I know where to find the expected yield on Fidelity page. As far as I know, only Vanguard and Fidelity indicate an expected yield. In no sense is that guaranteed. The actual rate (price) depends on all the competitive bids that were submitted. We as individuals, are entering non-competitive bids. It is not totally clear to me how exactly they decide the price for non-competitive bids. Notice that not all competitive bids are accepted, but all non-competitive bids were. At any rate, it's a very good price (rate) that we as individuals get. I've attached the press release from last week.... I got the price listed to 6 decimal points. June 26 2023 6 month results.pdf (54.6 KB)
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Post by yogibearbull on Jul 2, 2023 13:47:57 GMT
Fearchar , competitive orders, mostly from institutions and dealers, determine the final auction yield. ALL noncompetitive orders, mostly retail but some institutional (< $10 million), are filled at the final/clearing yield. Treasury knows how many noncompetitive orders it has on hand. Then, the noncompetitive orders, typically oversubscribed by 2x-3x, that meet the Treasury needs at a clearing yield are filled. In the end, ALL get the same clearing yield. Brokerage quotes shown before that are stale or guesses based on the secondary markets. This works best for retail customers as for once, they are on par with institutions and dealers. I know some here use secondary markets for Treasuries, but I stick with auctions. Edit/Add: I wonder how Warren Buffett rolls his $100+ billion T-Bill holdings? Noncompetitive or competitive orders?
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Post by Fearchar on Jul 2, 2023 16:49:20 GMT
yogibearbull, My understanding is that every Monday, Warren with his T-Bill man make a decision as to how much to tender towards either 3 or 6 month T-Bills. On average, they have roughly ~$100B/26 = $4B every week. Doubt that it is all at a single tender price, so his T-Bill man probably makes that decision. Only about 33% of competitive bids are accepted, so they need to be careful with their bids. The total of Non-competitive bids is typically only about $2B/week. That works out to about 2.5% of all the competitive bids Non-competitive bids do not impact the price of what's accepted. There may also be a $10M limit on the size of non-competitive bids. So, doubt they use the Non-competitive process very much. I found the following text on Investopedia, which helps with my understanding of the process: "There are two types of bidders for Treasury bills: competitive and noncompetitive. Competitive bidders are the only ones who actually influence the discount rate. Each competitive bidder declares the price they are willing to pay, which the Treasury accepts in descending order of price until the total face value of any particular maturity is sold out. Noncompetitive bidders agree to buy at the average price of all accepted competitive bids."So, noncompetitive bidders get the average price. What is confusing to me is that the Treasury Press releases quotes a median rate, which is much lower than the investment rate. They also quote high and low rates, but these probably have no bearing on individuals.
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