Generally speaking, have T-Bills been matching CDs or better, and what might be expected for the near term?
With Ally at 4.0% for 6 and 9 months, I think T-Bills have been slightly better and of course there is the exemption from state income tax.
Are T-Bills and CD rates likely to be affected measurably by the current or forecast Washington atmosphere? And would these CD and T-Bill rates be affected similarly or maybe differently as between the two?
How are T-Bills doing and what to expect over the near term?
Re: How are T-Bills doing and what to expect over the near term?
You have four questions, so I have four "my two cents" answers, for a total of eight cents:
Roughly.
About the same.
Unlikely.
Not in an appreciable way.
Roughly.
About the same.
Unlikely.
Not in an appreciable way.
Re: How are T-Bills doing and what to expect over the near term?
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Getting rich off of "smart people's" behavioral mistakes. Life does not bow to math formulas.
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Valuethinker
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Re: How are T-Bills doing and what to expect over the near term?
You are asking for a call on interest rates.MaxLerner wrote: Tue Mar 11, 2025 11:20 am Generally speaking, have T-Bills been matching CDs or better, and what might be expected for the near term?
With Ally at 4.0% for 6 and 9 months, I think T-Bills have been slightly better and of course there is the exemption from state income tax.
Are T-Bills and CD rates likely to be affected measurably by the current or forecast Washington atmosphere? And would these CD and T-Bill rates be affected similarly or maybe differently as between the two?
If interest rates fall, T Bills underperform longer maturity instruments like CDs.
And vice versa.
FWIW I have thought for a long time interest rates were headed *down*. But it hasn't happened yet. And the accuracy of my crystal ball? Well.
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jeffyscott
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Re: How are T-Bills doing and what to expect over the near term?
Market expectations are at the fed watch site (go to probabilities there):
https://www.cmegroup.com/markets/intere ... -fomc.html
The Fed rate is a short term rate, so other short term rates should directly follow that. Longer term rates will be based, in part, on that and the expected path of future path of the Fed rate.
Market expectations can also be determined from the yield curve. I don't know how to do that precisely, but since the 52 week t-bill rate is lower than the 4 week, a decline is clearly expected.
Expectations can be wrong and usually are, but it's unknown by how much they will be wrong. In any case, yes you can probably get 4% or more from 6-9 month T-bills and then there's a state tax exemption on top of that, so there's little reason other than convenience to use those CDs.
https://www.cmegroup.com/markets/intere ... -fomc.html
The Fed rate is a short term rate, so other short term rates should directly follow that. Longer term rates will be based, in part, on that and the expected path of future path of the Fed rate.
Market expectations can also be determined from the yield curve. I don't know how to do that precisely, but since the 52 week t-bill rate is lower than the 4 week, a decline is clearly expected.
Expectations can be wrong and usually are, but it's unknown by how much they will be wrong. In any case, yes you can probably get 4% or more from 6-9 month T-bills and then there's a state tax exemption on top of that, so there's little reason other than convenience to use those CDs.