I suspect you are correct. But, as you said, whatever. It doesn't matter what anybody thinks about the direction of rates (including JPM). All you can do is manage your maturities to mitigate some of the "falling rate" risk which is prudent even if that risk doesn't materialize. None of us have...
Buying a 52-week T-bill is a hedge against MM rates falling. I like to diversify over time because even though I have an opinion as to where rates will be over the next year, Mr. Market doesn't care what my opinion is. This week I'm in the 8, 26 and 52-week auctions in our taxable account. Right...
By the way, the 5.155% "investment rate" on the 52-week today translates to a 5.221% APY. (For those of you that like to play with spreadsheets use the YIELDDISC function. In reality, your investment will rise by 5.207% since 52 weeks is a day shorter than a year). When you compare money market...
In our taxable account I am in the 52 week auction today. Even at 5.1% we will be better off than purchasing a 12 month CD at 5.25% (highest this morning at Schwab) after accounting for state taxes (breakeven would be 4.98% on a treasury for us). In retirement accounts I'm buying CDs.
And I just replaced it with CUSIP 3130B13S4, FHLB 6.5% bond maturing 05/09/2044 callable quarterly starting 08/09/2024. And if that gets called I'll just replace it with another one. Lather, rinse, repeat.
I got a call notice this morning for my FHLB 6.9% bond maturing 11/06/2043. I'm not surprised, but at least now I know the call threshold (for now) is somewhere between 6.6% and 6.9% for those long term (10-20 year) callables. No big deal. I'll simply deploy into another FHLB long-term callable...
But...but...but... Joe Namath, Jimmie Walker and Henry Winkler told me it was free! I trust those guys. They wouldn't lie to me, would they? :rolleyes:
Current best non-callable brokered CD rates at Schwab (04/26/24):
12 mo - 5.15%
18 mo - 5.05%
24 mo - 5.00%
36 mo - 4.85%
48 mo - 4.65%
60 mo - 4.55%
Rates are 5 basis points higher this week on 24-60 month CDs, unchanged on shorter maturities.