1M Treasury declines to 3.4% today: discussion topic

[chirstsboi_willingservant]

Treasury.gov is reporting today that 1M Treasuries are down to 3.4%. See heres: https://home.treasury.gov/resource-...yield_curve&field_tdr_date_value_month=202304

With the overnight lending rate (aka: Federal Funds rate) at 4.75%, the 1M Treasury is an exceptionally poor buy. Why would banks be piling into 1M Treasuries to the point where the price has climbed/yields have fallen so low?

The current theory I'm finding across the press is that US Debt Ceiling talks have gotten scarier. I haven't been following the political news too closely however, and would like to start this discussion topic on this subject.

Having such a low 1M Treasury Bill rate is absolute insanity given the current market conditions. Are there any other geopolitical events going on that could explain this incredible abnormality?

 

[willprez]

@chirstsboi_willingservant A 1.64% spread between one month and two month is one of the craziest things I have seen.

 

[%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82]

@willprez 1-3m tbill spread is largest all time

Euro funded ust cds is over 100bps.

Stress is creeping into funding markets as the gop position gets more insane and the market comes to terms with gs view that the ceiling is in June and not August

 

[colton18]

@%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82 GS assumes Treasury matches TSP 401k today and doesn't delay the matching.

Protip, they'll delay it like they did last time.

 

[linktech]

@colton18 That is what these government people do they will either do something like this or they will probably change the definition of the recession. This is probably their way to handle the things and I don't think it is good way.

 

[colton18]

@linktech Whatever is most convenient for them

 

[resjudicata]

@colton18 Just like everything now. Kicking the can.

 

[sarah2012]

@%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82 I honestly do not understand all these things but I do understand however the things are really bad.

And if I am being honest I do not see them getting better anytime soon also.

 

[pandemic]

@sarah2012 Why are things bad?

 

[curiosity11]

@sarah2012 Pick a month of any year in history and someone said this

 

[jocurizuma]

@%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82 No market is worried about a default

 

[%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82]

@jocurizuma Tell me how you don't work in finance without telling me you don't work in finance.

 

[jocurizuma]

@%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82 There is 0 chance the “insane gop” is gonna let america default. If anything you more told others you don’t tbh

 

[bukowski]

@jocurizuma Clearly you haven’t been paying any attention to exactly how bugfuck insane the GOP has become. Of course they would absolutely let America default.

 

[%CE%A7%CF%81%CE%B9%CF%83%CF%84%CF%8C%CF%82]

@bukowski Mcaethys bill he floated two days ago doesn't have the votes

 

[daniellea]

@jocurizuma A bit late reply, but the GOP practices stochastic brinksmanship, like the two tied-together mountain climbers dancing at the edge of the cliff, using the analogy used by Nobel Memorial prize winner Thomas Schelling to describe nuclear posturing.

So you’re standing at the edge of a cliff, chained by the ankle to someone else. You’ll be released, and one of you will get a large prize, as soon as the other gives in. How do you persuade the other guy to give in, when the only method at your disposal—threatening to push him off the cliff—would doom you both? . . . Answer: You start dancing, closer and closer to the edge. That way, you don’t have to convince him that you would do something totally irrational: plunge him and yourself off the cliff. You just have to convince him that you are prepared to take a higher risk than he is of accidentally falling off the cliff. If you can do that, you win. You have done it by using probability to divide a seemingly indivisible threat. And a smaller threat can be more effective than a bigger one. A threat to drag both of you off the cliff is not credible. A threat to take a 60 percent chance of that same thing might be credible. . . . Madness can be wickedly rational. If one of those two folks on the cliff can convince the other that he is just a bit nuts, that makes his threat to drag them both off the cliff much more plausible. Some defenders of Richard Nixon used to claim that the evidence of insanity that bothered a few Americans was actually a purposeful strategy to enhance the deterrent power of our nuclear arsenal.

The GOP dances close to a catastrophe to exact concessions, but they have to make the threat credible. To make it credible, there has to be a risk of a real slip-up. If a slip-up happens, they will rush to fix it (or do more brinksmanship), but the damage, both short and long term, will have been done.

 

[colton18]

@willprez We live in truly fascinating times

 

[caffry]

@colton18 I don't know if these are fascinating time but I am sure that these are time in which we are broke and it is not getting better.

Shit is probably going to get worse before it gets any better.

 

[resjudicata]

@caffry It likely has to be that way.

 

[eagle27]

@willprez It may be the craziest thing that you have seen but trust me it can always get more crazy and that case you would want to stay away from it.

This definitely is not something which I would suggest you to invest in.