1/ Why would anyone buy a 10-Y paying 3.95% and lock the money up when you can get a CD for near 5% and lock in for about year or so?
1/ Why would anyone buy a 10-Y paying 3.95% and lock the money up when you can get a CD for near 5% and lock in for about year or so?
Sometimes just to simply "follow the money". A puzzle between the different times of investments that always tell another story, and sometimes moar of what is going on when better understood.
That is what most of the Twitter economists, goldbugs, and crypto advocates overlook.
They do not watch capital flow which tells a great deal of the story.
They are not concerned with that. 😆 LOLZ@"Twitter economists"
2/ This doesnt make sense and why inverted yield curves are so important to understand. However, there is something else to look at.
3/ In spite of the return being less, the auction for the 10Y was robust. Why is this and who would be buying?
4/ The answer lies no so much in the return but in the surrounding economics. What is really going in?
5/ Is all boils down to the idea of locking rates in. One will take a 10Y at a lower rate if the expectation is that short term rates will go down. That is why people are suddenly jumping out to the long end.
6/ So while the mainstream financial media espouses at the shitty 30Y auction, the 5 and 10 were on fire. This is how the process works. It starts moving further out over time.
7/ All the while people keep focusing upon inflation and the Fed, two things that either are misunderstood or do not matter much.
8/ Amazing how many people simply ignore the market to espouse some viewpionts that are nothing more than theory.
It's probably not the best, but I am currently saving money each week and buying a one month note each week. Will decide what to do when short terms start falling. Currently getting about 5.2%