1-3 Month T-Bill Yields to 0%
An expected consequence of the flight to ‘safety’ (sarcasm ours) has been a decrease in interest rates. While rates have been far into negative territory for quite some time now, today is the first day that nominal rates have gone to 0.0%. What this means is, at the current price, the 1-3 month T-Bill series is paying zero interest.
While this is not disimilar to what most consumers have been experiencing in their checking and even savings accounts for some time now, these are perceived to have even less risk than USGovt. debt. In our next post we’ll go a bit deeper into the various kinds of risk associated with various financial instruments. This is something we probably should have dedicated an entire column to some time ago even though we often referred to various types of risk.
Put simply, there is more generalized systemic risk (non-diversifiable) than at any time in the history of US financial markets. We are certainly living in interesting times. We will re-post an article that was written nearly a decade ago on risk in very general terms. Stay well and stay tuned.
Sutton/Mehl