Questions tagged [government-bonds]
for questions that relate to government bonds. It is recommend you use a country tag or state what country you are referring to. A government bond is a bond issued by a national government, generally promising to pay a certain amount on a certain date, as well as periodic interest payments.
182
questions
1
vote
1
answer
97
views
How can TIPS have negative real yields?
In this Investopedia explainer about TIPS, it says:
The yields on TIPS are often negative. This is because after taking into account the effects of inflation, the real yield is negative. For instance,...
- 121
0
votes
3
answers
151
views
Risks of leveraged government bonds
Given that Treasury bills are theoretically assumed to be risk-free investments (not going into whether they really are or not), is there any reason anyone who is planning on keeping the bonds until ...
- 3
0
votes
1
answer
80
views
Risk of bonds bought on the primary and the secondary markets respectively
Let's suppose investor 'A' buys $100,000 of US inflation-linked treasury bonds, and that investor 'B' buys $100,000 of an ETF that tracks the exact same type of TIPS.
Let's suppose that, after ten ...
- 1,241
1
vote
1
answer
183
views
Why is the price of a 1 year to maturity bond so high?
I am looking at the 2½% Index-linked Treasury Stock 2024 bond and I can't understand why its price is so high (£377). There is only a year left!
- 509
3
votes
1
answer
210
views
Can I buy I-bonds with my tax refund, as a non-resident?
I want to own American I bonds, but I'm not a US citizen/resident so I don't have a SSN (I live in Canada). As such, I can't just create a TreasuryDirect account and buy I bonds there.
Here's my plan:
...
- 133
1
vote
2
answers
168
views
Can I deduct defaulted Treasury bonds from my taxes owed
I purchase a U.S. Treasury bond. If the government doesn't repay it, may I deduct the face value of the bond from my income tax payment?
- 119
4
votes
3
answers
1k
views
How does a rollover work with Bonds?
I understand how a rollover works with personal loans. An easy example would be a car. Someone wants to buy a new car, but they still have an outstanding balance on their current vehicle. So the ...
- 351
1
vote
0
answers
42
views
How can Yield to Worst be close to Yield to Maturity on 10 Year Agency Bonds that are Continously Callable
For instance, this FFCB bond (3133EN4Q0). Right now, YtM and YtW are quoted to me (fidelity and schwab) as about 15 basis points (if I'm calculating basis points correctly: 5.83 versus 5.69).
If YtW ...
- 111
5
votes
1
answer
529
views
What's the real yield on this bond?
I've never bought bonds before and I'm looking into US Treasuries. The 3mo treasury below is described as having a ~4.9% yield. How is this number derived?
To me, it looks like if I buy this note with ...
- 151
-4
votes
2
answers
316
views
Why aren't Treasury bill auction reopenings marked as reopenings on the Treasury Auction Schedule?
Let's consider on the 13-week bill whose auction date is Monday, March 13, 2023 on Treasury Tentative Auction Schedule. It's not marked as a reopening on the Treasury Tentative Auction Schedule (no R ...
- 11.2k
-6
votes
1
answer
134
views
What part of the auction process for U.S. Treasuries makes it impossible to enroll in the auto-rollover feature after the initial order entry?
When trying to activate auto-rollover for an already purchased Treasury security on Schwab, I get the message:
This security is ineligible for auto-rollover. Due to the nature of the auction process ...
- 11.2k
2
votes
0
answers
38
views
How should I structure Series I Savings Bond accounts and registrations for a family of 3?
I have bought the max 10k allowed for each of us, for a total of 30k.
Right now, I have a separate account for myself and my wife, with the bond registration for ourself and the other person.
My Name ...
- 121
2
votes
0
answers
145
views
The interest rate of a (U.S. Treasury) "Floating Rate Note" (FRN)
I am having trouble to reproduce the calculation of the interest rate of a (U.S. Treasury) "Floating Rate Note" (FRN). Can you help me to find my error?
The calculation is described here: ...
- 245
0
votes
1
answer
128
views
Investing in US treasury bonds
I would like to put my money in the safe investment but I would like to earn more than regular savings account has to offer. But I would like to understand the mechanics of it for a regular investor.
...
- 509
1
vote
1
answer
145
views
Why did SHY ETF only drop 5% YTD but IEF dropped 15% when yield curve is inverted
I don't understand the pricing of these two ETFs. I understand the effect of duration risk, thus, making IEF more volatile but this explanation would contradict with the inverting yield curve.
In ...
- 165
3
votes
2
answers
440
views
Why do government bonds prices fluctuate? [duplicate]
I've heard that bond yields go up if interest rates also go up, which to me makes sense for corporate bonds since if interest rates go up company prices could fall since people spend less and ...
- 713
2
votes
1
answer
393
views
Accidentally bought I Savings Bond for $20,000 and TreasuryDirect hasn't credit extra money
Signed up for TreasuryDirect.gov and added myself and my spouse as registrants:
Purchased 20,0000$ of I Savings Bond on 04/25/2022:
I received an email next day saying below but still haven't ...
- 285
12
votes
3
answers
1k
views
Why does the yield on SHY (US treasury bond ETF) seem so bad?
With the US interest rate increasing so much lately, I am interested in putting some more of my money into US treasury bonds. I am looking at the SHY ETF on Fidelity, which is an ETF comprising short-...
- 695
2
votes
0
answers
43
views
Does the yield spread between inflation-indexed bonds and regular bonds overestimate inflation expectations?
Inflation expectations can be determined from the yield spread between inflation-indexed bonds and non-inflation-indexed bonds. For example, US inflation expectations for the next 5 years can be ...
- 16.9k
7
votes
1
answer
769
views
Is the US market really expecting less than 3% yearly inflation over the next 5 years?
Several people in my family are fearful of upcoming high inflation, perhaps due to the relatively high US inflation figures reported in the last few months (8%+). They think that the US inflation rate ...
- 16.9k
1
vote
1
answer
68
views
Yield curve to price bonds
I am having a hard time finding books/materials that would teach yield curve pricing using real-world problems/examples
I would like to understand if can I use the below treasury yield data (I believe ...
- 13
2
votes
1
answer
74
views
I bonds interest calculation
Current I bond annualized rate is 6.89%. How much interest will accrue in the next 6 months on a $10,000 purchase. Note 6.89% is not what will be earned in a year since the next 6 months will have a ...
- 21
1
vote
2
answers
116
views
How many series I savings bonds can you buy at 9.62%?
I know the cap is $10,000 but it looks like you can put $10,000 in for each family member. Can you also do it for an LLC or Trust fund?
- 11
3
votes
1
answer
723
views
Can one buy I bonds within an HSA (Health Savings Account)?
I read:
You can’t buy I bonds within an IRA or employer-sponsored savings plan, such as a 401(k) plan. You’ll need to buy I bonds with money that you didn’t save in these programs.
Can one buy I ...
- 11.2k
1
vote
1
answer
167
views
1 year T-bill for buying a car in Europe
I live in Europe and I plan to buy a car exactly one year from now. I want to invest now approx. 32000 EUR in 1 year bonds to profit from the interest rate and to secure my money until I need it. My ...
- 135
-3
votes
1
answer
140
views
Why is the purchase of US I bond only possible for US citizens/residents and US civilian employees?
I read on https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm:
Who may own an I bond?
Individuals: Yes, if you have a Social Security Number and meet any one of these ...
- 11.2k
1
vote
1
answer
1k
views
TreasuryDirect Reinvest T-Bills (Gap or no Gap)
When you set a T-Bill (say 3M) to reinvest on TreasuryDirect, will there be a one week gap when reinvesting (due to auction scheduling) or will you be fully vested for 2 years (get 2 year's worth of ...
- 297
8
votes
3
answers
5k
views
Can I convert interest income to capital gains by selling t-bills before maturity?
I've been buying 6-month treasury bills. The interest is taxed at maturity as interest income. If however it could be taxed as short-term capital gains, I could avoid paying any taxes on it because I ...
- 181
3
votes
1
answer
89
views
Where are the prices of secondary market TIPS trades?
The primary market prices for Treasury Inflation-Protected Securities (TIPS) can be found on TreasuryDirect's Auction Results webpage. But where can I find the prices for secondary market trades? Does ...
- 16.9k
1
vote
1
answer
163
views
What is the correct formula for Bond Yield?
Taking an introductory investment course, was following up on bond yields.
I thought the yield is calculated as follows (sorry for some reason LaTex formatting doesn't work - so inserting an image):
...
- 165
3
votes
0
answers
364
views
How to buy I bond for child and spouse?
To purchase I bond I followed the steps below:
Opened TreasuryDirect account using my SSN and other information.
Purchased a I Bond under my registration.
Created a new Primary Owner registration ...
- 171
1
vote
0
answers
41
views
Need help understanding bond yield outliers
I was looking at bond yields on Fidelity and noticed a few outliers.
The tables below show the 'Highest' and 'Median' yields.
Note the outliers - Agency/GSE 10yr and Corp AAA 2yr - where the highest ...
- 111
0
votes
0
answers
69
views
What type of account is used for individuals to trade government issued bonds directly with Treasury?
Here is my understanding - an account at a financial institution that allows an individual to trade corporate bonds is a brokerage account.
Here is my question - an account held by an individual at ...
- 161
3
votes
1
answer
200
views
Why is there a sell off of US bonds if interest rates in the US are currently rising?
My understanding is that as interest rates go up, the yield offered by bonds also increases (in response).
If the yield of bond increases, then why are people selling bonds?
- 423
1
vote
2
answers
115
views
Market risk for TIPs vs. I Bonds
Treasury Direct has a good comparison between TIPs and I Bonds:
https://www.treasurydirect.gov/indiv/products/prod_tipsvsibonds.htm
However, I want to make sure I understand when you can lose ...
- 584
19
votes
4
answers
4k
views
How Is There A Yield Curve For Treasuries?
Why would anyone buy a 1 yr T-Bill with a return of 1.25% when you get double that on a 30-year T-Bond? Where is the risk and/or liquidity premium coming from?
There's a highly liquid, secondary ...
- 293
0
votes
1
answer
98
views
How is price of 1 year Treasury Bills calculated on this chart?
The chart shows USD 0.85. I assume it is per USD 1000 face value T-Bill. What does this USD 0.85 mean?
- 297
3
votes
1
answer
147
views
Why is the price of 10-year note different for the same yield?
Looking at the price of 10-year note (ZN) futures, I noticed that the price of ZN futures corresponding to ~1.70% yield was ~128 today but was ~131 in March 2021.
Why is there such a huge difference ...
- 131
1
vote
0
answers
70
views
What does it mean to say a market is governed by technicals
In an interview, Mohamed El-Erian had this to say about the current situation for global bond funds:
I’m really glad I’m no longer managing fixed income bond funds because
technicals rather than ...
- 271
2
votes
0
answers
90
views
Why do we have *daily* series of T-bill yields?
I understand that each week the US Treasury issues new T-bills at different maturities (1-month, 3-months, 1-year, etc). As far as I understand, this issuance happens every Tuesday. After the auction, ...
2
votes
2
answers
66
views
When the 5-Year Treasury Note's yield is up 10%, Which note exactly do they refer to?
The 5-year Treasury notes, for example, are issued multiple times during the year, everyone have its cusip number, when they say this note yield is up by 10%. Do they refer to the most recently ...
- 927
1
vote
0
answers
121
views
What does the bond issuer/company do when the bond is oversubscribed?
I'm a beginner,
I see sometimes in news that a company issue bonds (1 million total issuance), but they received 3 million requests, what will they do with the two million excess ?
- 927
0
votes
2
answers
73
views
Compute coupon of treasuries
How do you compute coupon starting from yield and price? Since yield is coupon / par, which is 2 / 100 in this case, would it just be yield * price, 0.01906 * (102 + 1 / 32) with the data below? ...
- 1
-1
votes
1
answer
326
views
How often does the treasury department issue bonds and at what prices?
How often does the u.s treasury department issue bonds and at what prices? Does it issue bonds throughout the year with the same annual yield regardless of current bond prices in the bond market, as ...
- 927
1
vote
1
answer
52
views
How can I interpret this bond chart?
I am looking into buying a bond on DeGiro. I am new to this platform and to buying bonds.
From what I understand, bonds are usually issued in multiples of 1k and have a coupon rate that is paid to you ...
- 155
0
votes
1
answer
137
views
Are U.S government bonds completely liquid?
In the event of a market downturn like 2008, could I liquidate them whenever I wanted to at good price on a retail stock broker?
- 431
1
vote
0
answers
49
views
Question about the premium from selling bonds
Suppose I bought a $1000 ten-year treasury note (2031) with 4% yield. After one year, the yield decreased to 1%. If I sell it, how much premium will I get? Will I get (3% * 1000)? If the calculation ...
- 927
1
vote
1
answer
119
views
How can I benefit as an individual investor in bonds, from increasing of bond yield?
I'm a beginner, What do I benefit as an individual investor in bonds, from bond yields increasing ? If I bought a 10 years treasury bond at the beginning of this year with a yield of 1 and then it ...
- 927
0
votes
1
answer
152
views
How to buy United States 10-Year Bond and what is the code?
To trade a the Amazon stock, the code is AMZN. Is there a code for United States 10-Year Bond?
Investment.com shows US10YT but there is no such code in the Interactive Trader platform.
- 147
10
votes
5
answers
4k
views
What’s the difference between inflation and inflation tax?
I get that people seem to be using the term inflation tax as a metaphor for understanding inflation, but it seems to be a bit more than that. We all know that inflation reduces the buying power of our ...
- 327