Are we at peak rates for T-Bills?

[Sergio123]

I think that we are close for everything < 4 months.

 

[David Donner]

I think the economy is going to slow & the market, not the Fed, will start lowering the rates, with the Fed following. The budget cant sustain 5% interest on the national debt. The Fed knows this too.

 

[Sergio123]

Well then you can trade according to your thesis.

I am in the camp that long rates keep climbing for the rest of the decade. Saving the USD is the highest of priority. The economy will adjust and everything will be alright.

But we are just getting started. Still a long way to go.

 

[piezoe]

Estimates range from 40% to 100% increase in the total money supply. It’s unprecedented.

What measure of money supply are you using, or what is the source of these numbers? What comprises your 8T?

Let's just assume that during QE the Fed bought back 8 trillion worth of Treasury securities from the private sector by marking up private sector bank reserve accounts over the period March 9, 2009 through March 9, 2022. Wouldn't that mean that the Fed eliminated 8 Trillion dollars of "National Debt" over just 13 years? Shouldn't that make you, and wouldn't that make the MAGA Republicans, very, very happy? (I didn't look to see if the debt clock on Times Square went backwards. Did you?)

 

[piezoe]

I think the economy is going to slow & the market, not the Fed, will start lowering the rates, with the Fed following. The budget cant sustain 5% interest on the national debt. The Fed knows this too.

BOING!!! This would be fun to see. The market decides to retail loan at 4% while Banks are loaning to each other at 5.5%. Then Chase goes to a Manhattan pay day lender to borrow at 4% because Goldman is going to charge them 5.5% . YeeHaw

 

[nitrene]

Don't forget the other QT, assets (bonds, mortgages) rolling off the balance sheet of The Fed:-

View attachment 324863

They actually have now broken below the 8T mark lol.

But look at how much further they need to go. Buckle-up buttercup.

View attachment 324864

Amazing. They would have to let 7 Trillion in assets roll off the balance sheet to get to pre-Lehman Brothers. It seems unlikely to ever happen.

 

[SunTrader]

Amazing. They would have to let 7 Trillion in assets roll off the balance sheet to get to pre-Lehman Brothers. It seems unlikely to ever happen.

Might take hell to freeze over, but they have got rid of $1t or so ... so far.

 

[David Donner]

Another reason I think we are at peak interest rates for T-Bills is the govt cant afford the debt servicing at higher interest rates. The Fed knows this. They will yield on inflation to not make the budget impossible. https://www.zerohedge.com/economics/janet-yellen-suggests-much-lower-much-longer

 

[SunTrader]

Another reason I think we are at peak interest rates for T-Bills is the govt cant afford the debt servicing at higher interest rates. The Fed knows this. They will yield on inflation to not make the budget impossible. https://www.zerohedge.com/economics/janet-yellen-suggests-much-lower-much-longer

If that was the case they would have done so already - 2 or 3 increases back.

 

[Sergio123]

Another reason I think we are at peak interest rates for T-Bills is the govt cant afford the debt servicing at higher interest rates. The Fed knows this. They will yield on inflation to not make the budget impossible. https://www.zerohedge.com/economics/janet-yellen-suggests-much-lower-much-longer

The only solution to this problem is for the government to curb spending. T-Bill rates are set by market price.
Do you want full yield curve control like Japan?

The higher interest rates are for consumers. Not for government and banks. The Fed will setup some special facilities for the government and banks in order to meet their obligations.