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Buckle Up-CPI on Deck

Well just an hour to go and we have another round of economic news (the CPI) that will more than likely send markets straight up or straight down–or if we are super lucky markets will do nothing at all–low odds of that happening.

Markets are expecting .4% and .3% on the core (ex food and energy) month over month. Year over year is expected at 6.2% versus 6.5% last month with core expected at 5.4% versus 5.7% last month. NOTE the the bureau of labor statistics (BLS) is making a couple changes in how the CPI is calculated for January–you can read about it here. They had made some changes in late 2022 also–so who really knows if we have apple to apple numbers.

Monday we saw the 10 year treasury yield move a couple basis points lower to 3.72% –really just drifting a bit. Equities moved solidly higher–over 1%. Guess investors are pretty confident in a favorable CPI report.

My accounts were green by .2% on Monday–nice after a few red days–but really meaningless –plus and minus a bit – I am hoping to just hold the line and collect dividends and interest.

Once again I trimmed a little today – very little. I had a Good Til Canceled sell order in on OFS Credit 6.125% term preferred (OCCIO) that triggered. No buying again and I have a decent stash of dry powder now-guessing maybe 13% . It seems to me that there is no rush to redeploy $$ when I can get over 4% in money markets right now.

Ok–let’s get it going!!

6 thoughts on “Buckle Up-CPI on Deck”

  1. I can see more $ moving to $money market funds$ as the risk reward ratio changes to risk off as time moves forward, giving the Fed raises rates.

    I am about 10% cash now too.

  2. Just noticed the (coupon eq.) yield on the 6 mo. T-bill exceeded 5% yesterday. We started a rolling series of 6 mo. bills (26) and 1 mo. bills (4) late last summer, and currently two mature each week (10% of the total invested) and are usually just rolled over. Being exempt from state tax, the equivalent yield (what a fully taxed CD or savings account would need to yield to provide the same after tax result) on the new 6 mo bills is ~5.375% for us. Not a bad place to park some of your cash this year, especially if you reside in a moderate to high tax state.

  3. You’re last sentence says it all to me. 4.48% from SWVXX and likely going higher after next fed meeting so what’s the rush to deploy more capital. Thanks as always for the great insights.

    1. Is there any catch on how long you have to stay invested in these money funds, or can you go in and out at will?

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