18. Understand The Yield Curve, Treasury Bonds, and Stock Market Impacts
Market MakeHer Podcast
How Treasury Supply Affects Yields and Stocks
Jess Inskip discusses quarterly issuance, supply shocks, and how high supply raises yields and pressures stocks.
Today we're talking bonds, Treasury Bonds, that is. 🍸 Along with yields, impacts on the market, and how the US always pays its debts 🦁😏
🤨 What exactly is the yield curve and what does an inverted yield curve mean?
We're going to learn how to use this as a scrying tool to predict the future in terms of interest rate changes and economic activity. Let's demystify the fixed-income security market (did you know there is not just a stock market, but also a bond market?) and learn about the US department of the treasury and how they issue debt.
🔮Yield Curve Crystal Ball 🔮
Normal Yield Curve = great, economy expected to grow over time
Steepening Yield Curve = might mean inflation is high, short-run good for stocks, but see what the Fed does
Inverted Yield Curve = Not always, but can indicate a recession
*See GDP and Economic Data for the scrying results*
💰 Should We Buy US Treasury Bonds, Notes or Bills Now?
FYI: Bonds = Long-term; Notes = Medium amount of time; Bills = Short-term
Having a portion of your portfolio that is risk-free (i.e. bonds) helps to have you a more diversified portfolio.
As of Nov. 9, 2023:
- 2-Yr T-Note Yield: 5.037% (this is prettttty good for a short-term if you wanted to look into these - not advice, we are not financial advisors as a disclaimer)
- 5-Yr T-Note Yield: 4.654%
- 10-Yr T-Note Yield: 4.640%
- 30-Yr T-Bond Yield: 4.782%
💸 How do you buy US Treasurys?
Go to your screener tool (we taught you about screeners in Ep. 08) and select "category: fixed income or treasurys" and you buy them in an ETF.
🧠 FYI, treasurys is the plural when we're talking about US treasury securities to differentiate from "treasuries" as in an institution like the Treasury Department 🧠
🧐 Who is "The Treasury" and What Do They Do?
They are the finance department of the US government. They issue the debt.
⚡️ What does this have to do with the stock market rally?
The treasury announced the issuance of debt funding, and it was a slower pace of supply than the last quarter. And in the last quarter it was a ridiculous amount. This gave cla
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About Us 🌚🌞
Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend, a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We teach complex investing topics in a different way - from "Her" perspective.
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Investing involves risk. There is always potential to lose money when investing in securities. Market MakeHer LLC provides educational content and resources for informational purposes only. We are not registered financial advisors & do not provide personalized investment advice. Consult with a l...
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