Sunday, July 16, 2023

Juicy Interest Rates are Juicy

Six month T-bills are yielding 5.41% and I can lock in 5.858% on 5 year agencies. Surprisingly, you have to drop down to barely investment grade corporates to get that kind of yield. With inflation coming down at a moderate clip, Fed watchers expect one or two more quarter point hikes before rates settle. These aren't the once in a lifetime yields on treasuries that could be had in the 1980s, but they look pretty darn good compared to stocks that feel a little toppy. I don't plan to change my portfolio allocations much, maybe lean in a little more on the short end as the bottom of the bond ladder matures.

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