Well let’s get some more money and toss it out of airplanes–even the Federal Reserve is behind the plan – go big (or go home)!
I haven’t watched any business news on the tube the last 2 days-they are probably giddy with irrational exuberance. Whatever–I am only watching interest rates.
The 10 year treasury yield ended last week around 1.46% after popping to 1.61% last Thursday. Now we are getting a pause with the yield falling as low as 1.40% today. Will it go higher? I would think so–the rates move on inflation ‘expectations’, not on actual inflation and while investors are fickle I am not sure that expectations change in 1 or 2 days. On the other hand we have watched for much higher rates for long periods of time only to be wrong.
Last week I added some baby bonds from US Cellular–the 6.95% issue (UZA)–a partial position–(rated Ba1 and BB)–they go ex next week and I wanted to catch that interest payment. This helps balance the few investment grade positions that I own and have taken a spanking of late.
I also added a few shares of the Brookfield Infrastructure Partners 5.125% preferred units (BIP-A) to add to my losing position I had already. This goes in my ‘safe’ (quality) holdings box being investment grade.
So I am watching for the employment numbers come the end of the week–don’t really believe what I hear from the BLS, but a crazy good number (or bad) could move interest rates. A bigger number comes next week when the CPI is released on the 10th–is there inflation or not? Doesn’t matter to the Fed who would simply say that inflation is simply ‘transitory’ – they would have to say this as they have boxed themselves into a corner with dovish rhetoric on a continual basis.
So I watch and wait and act as conditions warrant. Losses in February were relatively minor and a portion has been recouped in the last few days.