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US Treasury CMB 161-day bill. Expected yield 5.27%, may go higher
May 25, 2023 at
02:49 PM
in
Finance
(7)
Deal Details
Last Edited by zjs2k May 31, 2023 at 02:27 AM
NOTE:
The yields listed here are annualized (APY).
The CUSIP for this CMB is 912797FJ1.
Current expected yield according to Fidelity is 5.3% (May 26), 5.268% (May 27).
Final edit: the result was out (May 30): 5.562% (investment rate, equivalent to APY).
This thread was moved out of the "Hot Deals" forum (understandably. I don't think Treasury will give SD a cut for promoting their T-Bills Haha!). Despite received much less attention than the other Treasury threads, I hope everyone read this got some useful information (like the difference between CMB and T-bills, or there are bills called CMB). I can't vouch for anyone else's comments here, but I tried to be clear about things that I know, I assume, I guess or I don't know in my comments.
Final recommendation: continue to purchase the Bills of all durations as long as they remain high yields. At 5+% yield with essentially 0 risk, it makes the risky investment in stocks / bitcoin or similar becomes less and less attractive.
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Since Treasury's CMB doesn't have a fixed schedule, which leads to less competitive bids, which in turn **usually"" leads to higher yield. This 161-day bill announced today has an expected yield of 5.27% according to Fidelity. But it **could** be higher. Example: last week's 21-day bill estimated yield ~ 5.5% (can't remember exactly). The final yield was 6.3+%.
Note: you can only buy it through brokers. Fidelity allows multiples of $1000 ("1 bond"). ETrade is multiples of $5000.
Seepost #163771055 for additional info on ETrade (Thanks to Jayman007)
The auction day is May 30. Be sure to place the order before then. (Before 12 AM for non-competitive CMB. Brokers may stop take orders before then. So place order early.)
https://www.treasurydir
The yields listed here are annualized (APY).
The CUSIP for this CMB is 912797FJ1.
Current expected yield according to Fidelity is 5.3% (May 26), 5.268% (May 27).
Final edit: the result was out (May 30): 5.562% (investment rate, equivalent to APY).
This thread was moved out of the "Hot Deals" forum (understandably. I don't think Treasury will give SD a cut for promoting their T-Bills Haha!). Despite received much less attention than the other Treasury threads, I hope everyone read this got some useful information (like the difference between CMB and T-bills, or there are bills called CMB). I can't vouch for anyone else's comments here, but I tried to be clear about things that I know, I assume, I guess or I don't know in my comments.
Final recommendation: continue to purchase the Bills of all durations as long as they remain high yields. At 5+% yield with essentially 0 risk, it makes the risky investment in stocks / bitcoin or similar becomes less and less attractive.
=======
Since Treasury's CMB doesn't have a fixed schedule, which leads to less competitive bids, which in turn **usually"" leads to higher yield. This 161-day bill announced today has an expected yield of 5.27% according to Fidelity. But it **could** be higher. Example: last week's 21-day bill estimated yield ~ 5.5% (can't remember exactly). The final yield was 6.3+%.
Note: you can only buy it through brokers. Fidelity allows multiples of $1000 ("1 bond"). ETrade is multiples of $5000.
Seepost #163771055 for additional info on ETrade (Thanks to Jayman007)
The auction day is May 30. Be sure to place the order before then. (Before 12 AM for non-competitive CMB. Brokers may stop take orders before then. So place order early.)
https://www.treasurydir
220 Comments
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1. Could the actual yield be lower than expected yield?
2. Are the tax implications the same whether you buy it on Fidelity or through TreasuryDirect?
Thank you
2. yes. For me, Fidelity's 1099 form will indicate the yield from treasuries (a different category number) and it will not be account toward your state/city taxable income. Basically, the same format as what you got from TreasuryDirect.
The United States still controls the fiat currency, meaning a true default, as in no money to pay debt holders, is currently impossible. Our politicians will continue to spend with wreckless abandon, debt will be deleveraged by printing more currency, inflation will result, and those sitting on the sidelines waiting will have the greatest loss of wealth.
Yes T-bills and for some reason nonstop to Ukraine. Everyone else will be told to get in line.
Shahhere
The US debt balance is overblown, $31T sounds like a lot and it is but then you realize US 2022 GDP was $25T, less than 2x (1.25x) levered which is the gold standard for most investors to invest in companies. A bank will loan someone a $450K mortgage on 75K salary for perspective or 6x levered...
Thank you.
Edit: I see the problem. If I transfer money today it won't be settled before the auction.
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Tell me I'm wrong someone so I can hold my nose and buy.
What's probable is the debt ceiling drama will be over and everything goes back to normal. It's a political game and looks real fun. But if you are not into that, you should think how to earn some money from it.
If US indeed default again and get downgrade again, that's your change to rake in some high interest treasuries. Think about it this way, treasury is still safer than your savings account, which can disappear when bank is closed, your government insurance on your savings has lower priority than payback those treasuries.
My Vanguard Federal Money Market account holds my cash, and it yields about 5% now. The bond yield mentioned in this thread is 5.27%. The difference doesn't seem big. Is it worthwhile to shift the cash from MM to this bond?
Looking at the ticker few people provided, looks like the price is already set and you're buying the current 5.something YTM expiring in Nov
Using TDA if that matters
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