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Will T-bill continue to ‘chill’ with rate cuts?
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Money-market rates, which are keyed off of the Fed’s current 5.25 per cent to 5.5 per cent policy band, have held steady and offered no surprises.
PHOTO: REUTERS
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It has been the ultimate no-brainer for more than a year: Park your money in super-safe Treasury bills (T-bills), earn yields of more than 5 per cent, rinse and repeat. Or as billionaire bond investor Jeffrey Gundlach put it: “T-bill and chill.”
Even now, with officials at the Federal Reserve poised to ease benchmark interest rates from a two-decade high – a move that would instantly push down yields on bills and other short-term debt – money-market funds are thriving. They raked in US$106 billion (S$140 billion) in August alone and their balances, at US$6.24 trillion, have never been higher.
