Dr. Strange Move or How I Learned to Love the Bill

After a couple of years of disinflation, the Fed changed directions and started lowering rates. By most measures, the economy had been humming along near a Goldilocks level. No recession in sight. In November, 2023, I made my first frontrunning the Fed trade. I bought a little EDV and TLT and sold a few months later with a loss of -$148.33 when it proved volitile. Long bond rates fluctuated in a range with no clear direction. Not what I expected. In September, 2024, I made a larger long bond trade in VGLT just before the Fed officially did their first half point rate cut. I sold two weeks later for a loss of $-329.04 when rates moved the opposite direction. Not only was the rate cut priced in, but the inflation expectations for the future took precedence over the start of a rate cut cycle. These are small losses, so I can't complain. It's been a fantastic year for stocks and T-bills. For the last year, I've been mostly happy collecting over 5% on T-bills. With the second Fed cut announced today, I pushed some cash into bills in the 18-24 month range. The long end has befuddled me twice so I'm sticking close to shore, body surfing the tiny crest.