🦧 closing gap
🦧 closing gap
"doctor appointments as low as $19”
🔢 the hierarchy of bonds
under normal circumstances, riskier bonds should give us higher yields (returns). roughly speaking, from lowest to highest risk / yield, the list goes like this:
the fed funds rate (the rate at which banks borrow from each other)
us treasury bonds
invest grade bonds (“IG”)
junk bonds (aka “high yield”)
😅 things are different at the moment
most notably, as of writing, the us 10-year treasury yield stands at 3.543%, 0.64% lower than the 2-year treasury yield
it’s been like this since july ‘22 – when short-term debt has higher yield than long-term debt (for the same borrower; the us government in this case), this typically reflects bond investors' expectations for a decline in rates in the longer-term, an indicator of a recession
also an anomaly (as shown in the image above) – us investment grade bonds (relatively low risk corporate bonds rated bbb or above) are showing yields barely above the current fed effective cash rate
this can be another big signal of a recession, and ultimately a sign for rate cuts
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🕰 111 years ago today…
the average rate on new credit cards for q1 ‘23 was 22.15%, up from 18.32% a year ago. the overall average credit card interest rate is at its highest since 1994 (click image)
