Questions tagged [treasury]

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5 votes
2 answers
2k views

Financing kids' college with bonds

The rates of treasuries went up in the US. I would like to save for college for my children so I know that in 10 years when they need to pay for college I will have the funds. Could I buy 10 year ...
  • 171
3 votes
1 answer
202 views

TreasuryDirect.Gov Tax Withholding

Anyone know where in treasurydirect.gov website we setup tax withholding for interest accrued owning T-Bills and Notes?
1 vote
0 answers
52 views

How do I determine Interest Rate of 4-Week Treasury Bill

I purchased 4 week treasury bill for $2220 Treasury will take out $2212.4545 from my Bank account Treasury says Investment rate = 4.446% and High rate = 4.370% But I calculate interest rate as 4.43361%...
  • 297
1 vote
0 answers
75 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: ...
  • 215
1 vote
1 answer
43 views

Treasury Yields -- Quoted on an Investment Basis vs. Discount Basis

I'm looking at the St. Louis Fed website's historical data for the 1-year treasury. There are two different but similar pages. One is titled: 1-Year Treasury Bill Secondary Market Rate, Discount Basis ...
1 vote
1 answer
94 views

Calculation for current value of Ibond in TreasuryDirect

I have purchased I bond from TreasuryDirect in the amount of $10K in 8/2021 and 1/2022, totaling $20K. Currently, TreasuryDirect shows the interest rate of 9.62% for my 8/2021 purchase and 6.48% for ...
0 votes
1 answer
94 views

Invest in treasury bonds or pay off loan?

I have about $5000 coming in from a stock sale (ESPP). My plan with it was to invest in treasury bonds (I), since the rate is really good right now (~6.69%). It changes every 6 months (https://www....
  • 179
4 votes
2 answers
975 views

Why is there a discrepancy between current inflation rate and I bond rate in the US?

According to https://www.rateinflation.com/inflation-rate/usa-inflation-rate/, the November 2022 inflation rate is 7.11%, but the I Bond rate according to Treasury Direct is 6.89% (from November 2022 ...
0 votes
1 answer
40 views

T-bills yield is the lower bound for the return?

When I look at the US treasury rates I see a number say 4%. That means if I buy 12m note today I will get 4% interest in 12M. This will be my return. What if the rates went down and as a result the ...
  • 171
0 votes
1 answer
113 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 ...
7 votes
6 answers
1k views

safe investment for maintaining purchasing power

I have $100,000. I am going to need the money over the next year. I want to protect its purchasing power relative to inflation and also have some reasonable low risk return. What would be a good ...
  • 79
11 votes
4 answers
4k views

Why would someone buy bonds with yields comparable to US Treasury bonds?

Fidelity is showing the following chart for current bond yield rates: For 1-year bonds, US treasure currently offers a 1-year yield of 4.62% which is above or comparable to: Corporate AAA/AA bonds: ...
  • 5,654
3 votes
1 answer
119 views

How to determine what would be considered a good rate for 4-52 week Treasury bills?

According to the information provided by treasurydirect.gov, currently the rates for any Treasury bill ranging from 4-52 weeks are all above 4% (expressed yearly). Looking at the 10 year/3month ...
  • 55
2 votes
1 answer
64 views

Possible discrepancy between TreasuryDirect.gov Treasury Bill Investment Rate and Self-Calculated Interest Rate

I bought a 17 week treasury bill ending in Z93 as shown in the screenshot above. I placed 20,000 and after the discount rate, I paid 19707.13 for the treasury bill. According to the screenshot, the ...
  • 55
2 votes
0 answers
87 views

Do I have to report my T-Bills on taxes if they haven't yet been matured?

Do I have to report on taxes for 2022 year my 4 week T-bill if I buy them on Dec 6, 2022 (Maturity date Jan 3, 2023)?
7 votes
1 answer
824 views

TreasuryDirect.gov not showing monthly interest gained on an I bond

I bought an I bond on treasurydirect.gov and it was filled on 10/1/2022 (more than 1 month ago at the time of writing). My understanding is that I bonds accrue interest monthly but when I login now it ...
  • 237
0 votes
1 answer
42 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 ...
3 votes
2 answers
156 views

1 year CD or 1 year Treasury pros and cons

I was looking at treasury rate and CD rates . And It looks like Treasury rate is higher than CD . And with my own experience it is easy to buy either CD or Treasury. So My question why people buy CD ...
  • 816
2 votes
1 answer
79 views

How can I claim tax credit for a bond that has been frozen?

I own a USD-denominated Venezuelan bond. It expired in 2020, but the US government froze payment so I did not receive my capital or the final coupon. The bond did not default. How can I claim tax ...
0 votes
0 answers
11 views

How is implied volatility on future treasuries used to expect Forex volatility?

I was listening to some traders talk amongst themselves. One emphasized the importance treasury implied Vol as a useful indicator for forex vol/trading. I don't totally see the connection. I have a ...
1 vote
1 answer
237 views

Does a Treasury Note Pay Interest on the Maturity Date?

I'm looking for a clear example of Treasury Note interest payments. I've read this on the TreasuryDirect website: Treasury notes pay interest on a semi-annual basis. When a note matures, the ...
0 votes
1 answer
197 views

How do I reflect discount on a Treasury Note

I bought Treasury Note for long duration, for $1000 par I had huge discount, i.e i only had to pay $800 How do I reflect this $200 discount in tax return? Will I be sent an INT form? Or do I ...
  • 297
0 votes
1 answer
89 views

How do I compute the adjusted debt-to-equity ratio for a Treasury Stock?

I want to compute the adjusted debt-to-equity ratio. The formula is simple: ADE ratio = Total Liabilities divided by Total Equity and Treasury Stock. When I look for Treasury Stock for MSFT (https://...
  • 21
0 votes
1 answer
65 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 ...
17 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 ...
  • 273
0 votes
1 answer
48 views

Treasury shorts, liquity and yields

This article describes the relationship between treasuries shorts and treasuries market liqudity and yields: With short positions anticipating higher yields elevated and continuing to grow, liquidity ...
0 votes
0 answers
19 views

Treasury market liquidity derivation

This article discusses T-bill market liquidity/depth: Market depth -- derived from the sizes of the top three bids and offers on the BrokerTec trading system between 8:30 a.m. and 10:30 a.m. in New ...
0 votes
1 answer
40 views

What does it mean that UST10 have risen from 1.2 to greater than 1.7 over the last half year?

I'm a newbe in bonds market, but I'd like to ask what does it indicate that UST10 have risen from 1.2 to greater than 1.7 over the last half year? Does it mean that the bond market foresees high ...
  • 175
0 votes
2 answers
76 views

Why do raising short-term yields indicate that the economy is about to enter a recession?

Below is the excerpt from the article Term Structure Of Interest Rates Downward sloping — short-term yields are higher than long-term yields. Dubbed as an "inverted" yield curve and ...
  • 175
1 vote
1 answer
102 views

Series I savings bonds as gifts - how do limits & complications work?

Let's say Alice $10k in (electronic) Series I savings bonds for Bob as a gift. There's a limit of $10k in bond purchases per recipient, so this introduces potential complications. Consider the ...
  • 3,339
1 vote
0 answers
85 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, ...
0 votes
1 answer
57 views

Are US treasuries volatile and liquid enough for trading short term investment?

If I buy one bond (or bill, note) for 100.0 ($1000), is it common for its market price to go for 104.0 ($1040) within few days, so I sell it and make profit of $40 (which is more than its yield) ?
  • 857
1 vote
1 answer
109 views

Would I lose principal if I bought a 2% 1-Year Bill for $103.0?

Would I lose principal if I bought a 2% 1-Year US Bill for $103.0 (1000 + 20 - 1030 = -10) ?
  • 857
1 vote
1 answer
79 views

Can I place limit orders (like limit, stoplimit, trailstop..) in bonds (treasury bonds, municipal and other types of bonds)?

Can I place sell limit orders (like limit, stoplimit, trailstop..) in US bonds (treasury bonds, municipal and other types of bonds)? or it is only market orders?
  • 857
1 vote
1 answer
108 views

Why would anyone buy an old treasury while it is regularly auctioned during the year?

Why would anyone buy an old treasury while the same treasury (for example 5 year note, two years note) is regularly auctioned during the year? I mean if the yield rise why to buy an older note ...
  • 857
2 votes
1 answer
81 views

Are there market makers in bonds market?

When I order to mkt buy/sell stocks in US primary markets it excuted in seconds. In bonds markets, especialy in US treasuries, if I order to sell my bond or to buy an old bond, could my mkt order last ...
  • 857
0 votes
1 answer
56 views

Does the retail investors buy treasuries for trading as main purpose?

The yields for treasuries are very low, it is not logic to hold a treasury for 30 years to get two percent every year, I'm a beginner so I wonder if buy bonds/notes and waiting the yield to fall and ...
  • 857
-2 votes
1 answer
109 views

If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, does my profit be $100?

If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, if I sold it, does my profit will be $100? and does all other bonds' profits (municipal, corporate, international.....
  • 857
2 votes
2 answers
64 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 ...
  • 857
0 votes
1 answer
54 views

How is the first price of us treasury futures decided?

How is the first price of u.s treasury futures decided? Does it depend on the last price of the previous future contract ?
  • 857
-1 votes
1 answer
218 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 ...
  • 857
9 votes
1 answer
2k views

Do x-year treasuries become y-year treasuries (x-y) years later?

My understanding is that treasuries can be bought and sold (which is what causes their changing interest rate because of their changing price). Since they aren't static/locked assets, does that mean ...
  • 2,778
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 ...
  • 857
1 vote
1 answer
110 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 ...
  • 857
1 vote
1 answer
58 views

How can I find the price (not just the yield) of a treasury bond? [closed]

Sorry if this is a dumb question, but whenever I want to look up the US treasury bond, I can only find the historical chart for its yield. But how could I find its historical price ($1183.28 as in the ...
  • 155
1 vote
1 answer
117 views

TNote 10yr Futures YTM vs market yield?

I understand how to calculate the yield on a 10 yr TNote based on face, price & coupon. I don’t understand why the yield (and price) on a futures contract about to expire is so different than the ...
  • 11
1 vote
1 answer
213 views

Why are long-dated US treasury bond yields so low?

I know that the US Fed sets only the federal funds rate, which impacts only the shorter term treasury bonds. The longer term bond yields (ie 20, 30 years) are impacted by demand for those bonds. The ...
  • 2,778
0 votes
0 answers
42 views

US Treasury Bill will Mature on Thurs, Oct 22 - how to re-invest part of if before Maturity

I purchased 13-week Bill on US treasury. It will mature Oct 22. But I want to re-invest part of it today, Oct 18. When I log into my Treasury Direct account, there is option to edit my security, i.e. ...
  • 297
1 vote
0 answers
61 views

What drives long duration US Treasury Bond ETF prices?

I am looking at TLT, for example, a long duration (with average maturity around 25 years) bond ETF. I noticed that the fed funds rate (or the "interest rate" from federal reserve) has been ...
  • 271
1 vote
3 answers
198 views

Why are bond interest rates set at the interest rate set by the Fed?

I have a question about bonds: why do corporations, municipalities, and the treasury set bond interest rates at the current U.S Federal Reserve interest rate? Also, how does the Fed set interest rates?...