Treasury bills continue to soar as fed swaps price in peak policy rate of 5.5% in December
The 60/40 portfolio is now yielding less than six-month T-Bills for the first time in over two decades, according to Bloomberg
Our Analysis
- We expect short-term treasury yields to start taking allocation from other assets as savers get rewarded by central banks during this hawkish period.
- However, the debasement rate far exceeds the return adjusted for inflation.
- This could be bearish for crypto as treasury bills (U.S. 06 Month Yield) are over 5%, the highest level since 2007.
Highlights
- According to Bloomberg, cash is now paying more than a traditional stock portfolio for the first time in over two decades.
- Six-month T-Bill yields surpass 5% for the first time since 2007.
- The last time this happened was in the early years of the 2000s.
- December Fed Funds Futures are now trading at 5.4%
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