Are Rates Coming Down? Fed Rate Cut In Three Days?

Will the first Fed rate cut happen at this week’s FOMC meeting? Where did Treasury yields end this past week & what are the highest-yielding new issue agencies, corporates & brokered CDs currently?

#jenniferlammer #bondbeginners #bondmasters
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*Sources & referenced videos can be found in first pinned comment
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💎 Bond Beginners (our foundational-level bond course):

💎 Bond Masters (our intermediate-level bond course):




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SOURCES & FOLLOW-UP VIDEOS FOR TODAY'S VIDEO:




Here is the overview for Bond Beginners:

1. Bond Basics

What A Bond Is & How A Bond Works
Why Invest In Bonds
New Issue vs Secondary Market Bonds
Interest Rates & Bond Prices
Current Yield & Yield To Maturity
Always Remember This!
Buying At Par, Above Par & Below Par
Different Types Of Bonds
Wrap-Up

2. The Risks Of Bond Investing

Seven Key Bond Risks
Credit Risk
Interest Rate Risk
Reinvestment Risk/Call Risk
Inflation Risk
Liquidity Risk
Currency Risk & Country Risk
Bond Risk Mitigation Strategies
Wrap-Up

3. US Treasuries Overview

What Are US Treasuries
Why Invest In Treasuries
Where Can You Buy Treasuries
How Are Treasuries Taxed
Wrap-Up

4. Treasury Bills

What Are Treasury Bills (T-Bills)
When Do T-Bill Auctions Happen
Where Should You Buy At Auction
Auto-Roll When Buying At Auction
Where To Find Recent Auction Results
High Rate vs Investment Rate
Reopening Auctions
Cash Management Bills (CMBs)
Buying & Selling On Secondary Market
Wrap-Up

5. Treasury Notes & Bonds

What Are Treasury Notes & Bonds
When Do Auctions Happen
Buying Treasury Notes & Bonds
Auction High Yield vs Interest Rate
Floating Rate Notes (FRNs)
Treasury Zeros (STRIPS)
Wrap-Up

6. TIPS (Inflation-Protected)

What Are TIPS
When Do TIPS Auctions Happen
Nominal vs Real Yields
Negative Yields
How Do You Adjust TIPS For Inflation
Taxes On Phantom Income
Secondary Market Liquidity
Wrap-Up

7. I-Bonds (Inflation-Protected)

What Are I-Bonds
How Does I-Bond Interest Work
I-Bonds vs TIPS
The Annual I-Bond Limit
Wrap-Up

8. Agency Bonds

The Universe Of Bonds
What Are Agency Bonds
How Are Agency Bonds Taxed
Treasuries vs Agencies
Who Might Want To Consider Agencies
Yield-To-Call & Yield-To-Worst
Where Can You Buy Agency Bonds
Wrap-Up

9. Municipal Bonds

Our Bond Universe Gets More Complex
What Are Municipal Bonds
How Safe Are Munis
How Are Munis Taxed
The De Minimis Rule
Social Security & Medicare Premiums
Treasuries, Agencies & Munis
Who Might Want To Consider Munis
Wrap-Up

10. Corporate Bonds

Our Bond Universe Is Complete
What Are Corporate Bonds
How Safe Are Corporates
Corporate Bond Hierarchies
Five Key Features Of Corporate Bonds
How Are Corporates Taxed
Treasuries vs Corporates, Etc.
Who Might Want To Buy Corporates
Wrap-Up



Here is the overview for Bond Masters:

1. Stocks vs Bonds

Historical Performance
Are Bonds Really Less Volatile
Why Invest In Bonds
Accumulation vs Decumulation
Allocation of Stocks vs Bonds
Wrap-Up

2. Which Bonds Might Be Right For You

Treasuries & Other Types of Bonds
Nominal vs Real Yields
Inflation vs Non-Inflation-Protected
Taxable vs Tax-Advantaged Accounts
Wrap-Up

3. Bond Ladders & Other Bond Strategies

Normal vs Inverted Yield Curve
What Is A Bond Ladder
5 Important Bond Laddering Questions
Laddering When Rates Are Rising
Laddering When Rates Are Falling
Laddering When Rates Are Uncertain
What Is A Bullet
What Is A Barbell
Wrap-Up

4. Holding to Maturity vs Selling Early

Why Hold to Maturity
When To Sell Early Before Maturity
Tax Implications Of Selling Early
Wrap-Up

5. Individual Bonds, Bond Funds, Etc.

Why Buy Individual Bonds
Why Buy Bond Funds
Bond Fund Considerations
Key Bond Fund Concepts
CDs vs Treasuries
Other High-Yield Investments
Wrap-Up

6. Our B.E.S.T. Model Portfolios By Age

Our B.E.S.T Model Portfolios By Age
Model Portfolios In The Industry
B.E.S.T Model Portfolio Difference
How Much Do You Need To Retire?
How I Use The Rules of 100, 110, & 120
B.E.S.T Model Portfolios (20s)
B.E.S.T Model Portfolios (30s & 40s)
B.E.S.T Model Portfolios (50s & 60s)
B.E.S.T Model Portfolios (70s+)
Wrap-Up

7. The Decumulation Phase

What Is The Decumulation Phase?
Bear Markets & Recessions
What Can You Do In Bad/Bear Markets
Decumulation Tax Considerations
The 4% Rule
The Bucket Strategy
The Flooring Approach
Jen’s Bucket Strategy With A Twist
Wrap-Up



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[ScooterOnHisWay]

Nobody on YT does this better than Jennifer does in these videos.

[DavidLitman-phlu]

Congratulations for your 500th video!!

[ebrahimhabib]

Good job as always perfect explanation, very professional

[KayKaym]

There may not have been a rate cut, but the 1-year T-Bill auction for August 5th is showing an expected yield of 4.618%. This is a huge drop from a month ago. I'm now only buying 6 month T-Bills since I can still get 5% (for now). EDIT: Now the 6-month T-Bill is showing a 4.8% yield. I'm probably going for 8-week and/or 13-week T-Bills now. I'm also looking to buy longer-term bonds with coupon rates over 4% to replace the T-Bills that will be maturing over the next year. I expect interest rates to drop back down to 2.5% by 2026.

[craigroberts]

Thank you, Jenn. Great info and I need to get to work. We all knew things would probably change toward the end of the year and it has.

[rickclark]

In interest rate events such as the period we are in, once the Fed cuts the rate, are they historically most likely to not raise it again in the short term, or is it a coin flip whether they lower or raise again?

[alexadams]

Jennifer, thanks for the outlook forecast.

[Howard]

Great video outlining what is going on in the bond world!

[ATHJD]

Don't go all in is advice I take to heart. So glad I made last week's rung of my ladder extra small - and a 4 wk instead of a 17 wk. The July 31-Aug 1 auctions are a planned skip week for me, whew! I'm switching back to 4 wk bills in August. I'll keep buying T bills until they earn less (on the tax comparable Fidelity chart) than my HYSAs or any munis or agencies that are short enough for my time horizon. I wouldn't sleep at night buying agencies or munis that mature out past my life expectancy, even if they are callable.

[sueh]

My 4 week and 13 week laddered Tbills roll over each week. The 52 week ladder rolls next week.

[mandeepsaluja-tbqd]

Buying more tlt stock before fed first cut in September 🎉

[Tillyduck]

No cuts till after the election - then not much.

[Howard]

Is there any reason to use Treasury Direct instead of discount brokerage for buying Treasury bills, notes, bonds?

[petrao]

I think that a rate cut is unlikely this year, unless the economic date deteriorates significantly.

[vivisimonvi]

Am I not reading the data correctly? I'm looking at the 5-Year T-Note that was 4.625% in April of this year but it's been on a steady decline for every new auction since.

[shanahoddy]

Thank you! I’m considering a 3 year fixed myga. I’m seeing them around 6%

[blue-fjky]

I'm long fixed income closed end funds, specifically the PIMCO funds. I expect declining rates. These funds are actively managed, utilize leverage, and are high yield, with portfolios of high yield corporate, foreign, mortgage backed and other fixed income securities.

I think fixed income CEFs would be a good topic for a video!

[cesarebeccaria]

Our largest ladder step matured on the 25th. $50k. I put an order in at Fidelity for the 26 week that auctions on Monday. Fidelity expects a yield of 5.137%. Sounds good to me, plus the interest will fall into 2025. Every T-Bill we've bought thru Fidelity since March 2023 has had an actual yield at auction that beat the expected yield...except one--a 26 week from February this year, where the actual yield was under the expected by 0.015%. Fingers crossed.

[stephenluedders]

I understand that in the GDP numbers, government spending accounted for more than private sector spending. If this is the case, that should mean that the government continues the spending that is contributing to inflation. Any thoughts on how this government spending will affect the Fed approach going forward?