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i would never say that investors can’t pull the bond markets where they see fit
On a practical level , yeah they will have influence , but at a technical level the Fed can expand its balance sheet infinitely. I am simply saying its not just the market. We now have a big whale of a fed that buys and sells a $100 billion in securities a month.
Yes but that also now includes the Fed...on long rates too.
which is why your statement that only the fed controls things can be false.. it’s a tug of war at times and the fed doesn’t always win .
the fed has a tradition of over doing things both going down and going up and the markets try to pull things away as much as they can at times
some times the fed agrees with where markets have pulled things and sometimes they don’t and markets react . but it’s investors that first pull the markets …
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Originally Posted by gwynedd1
I would burn those economic books published in the 70s. The Fed completely controls the interest rates. Its not just the short rates ever since QE. If they can buy 30 year notes on a house, they control long rates too. Another persistent myth is the Fed controls inflation. Not really. The Federal budget does a lot more than the Fed does. When the Fed raises rates it might raise the cost of borrowing , but then creditors get a pay raise. Banks make more cash. Anyone with MM funds get cash and so one. However when da guberment raises taxes , and stops spending, you will not see much inflation.
That why when they raised interest rates and da gubemment kept spending I did not flinch with respect to the economy.
What's your current favorite textbook on Money & Banking? Mishkin?
it looks like you know more about him than I do. Back before 2008 , around 2006 I began looking at the sources of the post Keynesians like Adam Smith , Ricardo, Keynes, Schumpeter and Fisher and came to the conclusion that economics today is run by con artists running a shell game. Its also not hard to notice that the Post Keynesians are in exile in Kansas City. That is where I would expect to find the monastic mendicant order in this religion called economics. I found them through Eric Janszen. Trying to explain Modern Money Theory and endogenous money in 2009 to people was a real treat. They thought I was a lunatic. Well again. that's one reason why I have not been burned yet in the bond market.,, which is in a way a lot more simple than to know equity markets.
Thanks for starting this thread. Most of my fixed income is in munis. A couple of reasons for this: one is diversity, they are spread out among numerous cities & counties. Second is the warm fuzzies knowing one is supporting utilities, schools, specific endeavors. My tin foil hat has me staying away from Treasury bills. I wasn't sure I could justify my reasons though they are influenced by the brinkmanship we see in Congress.
Surprise, surprise, Bloomberg has put out a study raising additional concerns.
As for how to go about buying the munis I inherited a full service account at Raymond James that includes an admin who sends me a list with whatever criteria I spell out, usually I'll pick one or two out of a list of 40-50. I've figured the best times to buy are when 10 yr bonds are good.
Besides the rating, City Data comes in very handy because by delving deep one can find the debt per capita and that is very revealing. I limit my choices to my own state because otherwise the choices would be overwhelming.
Some investors might like "Defined Maturity ETFs". For example:
The iShares iBonds Dec 2024 Term Corporate ETF (IBDP) has a 30-day SEC yield of 5.49%.
Quote:
The investment seeks to track the investment results of the Bloomberg December 2024 Maturity Corporate Index.The fund will invest at least 80% of its assets in the component instruments of the underlying index, and it will invest at least 90% of its assets in fixed income securities of the types included in the underlying index that BFA believes will help the fund track the underlying index. The underlying index is composed of U.S. dollar-denominated, taxable, investment-grade corporate bonds scheduled to mature between January 1, 2024 and December 15, 2024, inclusive.
The Invesco BulletShares 2024 Corporate Bond ETF (BSCO) has a 30-day SEC yield of 5%.
Quote:
The investment seeks to track the investment results (before fees and expenses) of the Nasdaq BulletShares® USD Corporate Bond 2024 Index (the "underlying index").The fund generally will invest at least 80% of its total assets in securities that comprise the underlying index. The underlying index seeks to measure the performance of a portfolio of U.S. dollar-denominated investment grade corporate bonds with maturities or, in some cases, "effective maturities" in the year 2024 (collectively, "2024 Bonds").
Now is one of the better buying opportunities in fixed income since last fall with the fast rise in the 10 year. FYI.
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