Treasury bills continue to soar as fed swaps price in peak policy rate of 5.5% in December

Our Analysis

• We expect short-term treasury yields to start taking allocation from other assets as savers get rewarded by central banks during this hawkish period.
• However, the debasement rate far exceeds the return adjusted for inflation.
• This could be bearish for crypto as treasury bills (U.S. 06 Month Yield) are over 5%, the highest level since 2007.

Highlights

• According to Bloomberg, cash is now paying more than a traditional stock portfolio for the first time in over two decades.
• Six-month T-Bill yields surpass 5% for the first time since 2007.
• The last time this happened was in the early years of the 2000s.
• December Fed Funds Futures are now trading at 5.4%

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