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$130 Billion Tidal Wave Puts US Treasurys On Pace For Record Inflow
For an asset issued by a sovereign exhibiting signs of deteriorating governance and running an allegedly perilous fiscal position, US Treasurys sure are attracting a lot of investor cash in 2023.
Through August 9, inflows to US government bonds stood at almost $130 billion for the year, according to BofA's tally, based on EPFR data.
Annualized, the pace works out to more than $200 billion, putting 2023 on track to set an annual record.
As the figure above from BofA shows, it's not close. Th
The complexity of market dynamics, the many choices available to allocate cash, the unpredictability of investor actions, and the everyday (and unexpected) events dampening moods in world markets may stymie my investing impulses, but at the same time it all engages me, and sometimes entertains me. What a big pot of soup!
I have a good bunch of money working for me, though some of it works better than the rest. I ride it through foggy unpredictability, believing in the reasoning behind my investment choices. The good news is that the circumstances of the economy may be foggy, but it’s not murky. Record inflow for the Treasury is not a bad thing. CPI and PPI suggest the Fed is done raising rates. The Fed pivot will come, though we can’t presume the timing. I guess this is what a soft landing looks like.
Or this is what a soft landing head fake looks like. Time will tell 🙂 But, yes, the complexity makes any straight forward read impossible. Everyone is guessing, even more so than usual.
Stock Market returns were historically put at “7%”, and while Boggle/Vanguard indexes may be the best/easiest way to achieve that, US Govt at 5% is even simpler. Buffet or Apple can generate $5B risk free by doing almost nothing and that could be 5,000 people getting a $1M salary.
Treasury yields have been flirting with the next leg up for a while after a failed attempt in the spring that was thwarted by the regional banking crisis that wasn’t. Entirely possible the release of the Fed report pushes yields to the next plateau: 2yr 5.25, 10yr 4.4, 30yr 4.5