Fixed Income - Need advice on Feds impact Treasuries Yields

What do you mean, “based on yield”?
Yes, the feds decision on rate hikes determine the yields on government bonds, but long term bonds are influenced more than short term t bills or t notes.

That is probably why you see a lower yield for your longer maturities, though they are still short term. The last couple of 25 basis pt moves probably have the 1 yrs decreasing in value due to signs of a pivot.

I only recently passed the SIE so others feel free to correct me. Always learning.

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Fears of a Default Spur Buying Frenzy of 1-Month Treasuries

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Interesting happening in Thursday’s 4 week auction. The demand was so great the yield fell almost one half point. Barron’s says this was because it matures right before the projected date the federal debt limit is reached and people were trying to hedge against a possible default. Highly unlikely.

LINK

sorry paywall but u get the jest

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Also when talking heads give % change of .25% rate increase this is based on yield?

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TLDR: No, it's analysts' opinions on how likely the Fed will adjust interest rates (which affects yields) to achieve their mandate.

The Federal Reserve, also known as the Fed, is responsible for promoting maximum employment, stable prices, and moderate long-term interest rates in the United States. This is often referred to as the Fed's "dual mandate." The Fed uses a variety of tools, including managing the money supply, controlling interest rates, and influencing the bond market, to achieve its goals. The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Fed, responsible for setting monetary policy to achieve the dual mandate. The FOMC consists of twelve members, including the seven members of the Board of Governors of the Federal Reserve System, the President of the Federal Reserve Bank of New York, and four Presidents of other Federal Reserve Banks who serve on a rotating basis.



Edited to answer your second question -- the Bulls are saying they will bump up interest rates a quarter of a point and then start loosing it up. The Bears and Chicken Little's argue things are worse and interest rates will remain elevated. This is where you look into your own crystal ball and see the future for yourself.

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Edited to answer your second question -- the Bulls are saying they will bump up interest rates a quarter of a point and then start loosing it up. The Bears and Chicken Little's argue things are worse and interest rates will remain elevated. This is where you look into your own crystal ball and see the future for yourself.

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Somewhere in between

Fed can't risk being soft after transitory claims, and government isn't going to help them by spending less money.

I think we see that lagging impact though and they pivot - 2 more raises and they don't relent as quickly as people think


I think I shift 45/55 bond equities to more 35/65 in October when some bonds mature

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Also when talking heads give % change of .25% rate increase this is based on yield?

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That typically comes from the Fed funds futures market which is pretty correlated with short term treasury rates. They’re all related, and the fact that shorter term rates are higher than longer term rates implies a rate reduction along the way.