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The FED, administration policy, bonds and tariffs

DrVenture
edited June 9 in Other Investing
Caution, this may be triggering to those who feel an obligation to run defense for politicians. And will likely result in the usual comments that "experts are always wrong" from the peanut gallery.


https://www.cnbc.com/video/2025/06/05/own-gold-yen-and-german-bunds-wont-own-us-treasuries-at-all.html?

This is a highly likely scenario IMO. And due to play out in 6 - 9 months. My plan is to jettison U.S. bonds before rates peak or inflation takes hold. MMF may go lower, but it is still better than losing money.

Comments

  • a2z

    seems sensible for anyone in mostly the 'stay rich' camp who assumes they may not have unlimited time to recover from major collapse.

    the main countering force is 'billionaire bailout', which has reliably repeated for the most politically strong group that also invested recklessly. and this is why i fear crypto, on top of its foundational support for global organized crime.
  • CrashCrash
    DrVenture said:

    Caution, this may be triggering to those who feel an obligation to run defense for politicians. And will likely result in the usual comments that "experts are always wrong" from the peanut gallery.


    https://www.cnbc.com/video/2025/06/05/own-gold-yen-and-german-bunds-wont-own-us-treasuries-at-all.html?

    This is a highly likely scenario IMO. And due to play out in 6 - 9 months. My plan is to jettison U.S. bonds before rates peak or inflation takes hold. MMF may go lower, but it is still better than losing money.

    And what of private, corporate domestic US bonds, do you think?
  • DrVenture
    edited June 11
    To be fair domestic bonds may actually do well, when/if the FED is forced to lower rates. The pain will be up to that point. Which could be a while. Not sure exactly what I was thinking when I posted that second to last sentence. In fact, I thought about editing it after I posted it, and forget to do so.

    I am still pondering the whole situation. In general, as I am certain that you know, bond prices rise when rates go down. I assume that will apply to ALL bonds. Some doing better than others. Corporates may do better, but have the higher risk of default if the economy weakens. JMHO



  • CrashCrash
    DrVenture said:

    To be fair domestic bonds may actually do well, when/if the FED is forced to lower rates. The pain will be up to that point. Which could be a while. Not sure exactly what I was thinking when I posted that second to last sentence. In fact, I thought about editing it after I posted it, and forget to do so.

    I am still pondering the whole situation. In general, as I am certain that you know, bond prices rise when rates go down. I assume that will apply to ALL bonds. Some doing better than others.

    Thanks for the reply. I'm currently rather pleased with my equity funds' and single stocks' (3) performance; I'm using bonds for yield. The end of each month feels like payday, though I'm retired. and I deliberately select stocks which offer a dividend, too. I insist on 3% from those puppies, at least.
  • DrVenture
    Volatility from stocks doesn't tend to bother me as much as it does some people. I am comforted by the greater long term returns. What annoys me is buying investment grade bonds as "ballast" and having them lose money. Accepting the slower total growth, then getting hit with losses, really bugs me. I guess I do not have the retirement mentality.
  • CrashCrash
    edited June 11
    DrVenture said:

    Volatility from stocks doesn't tend to bother me as much as it does some people. I am comforted by the greater long term returns. What annoys me is buying investment grade bonds as "ballast" and having them lose money. Accepting the slower total growth, then getting hit with losses, really bugs me. I guess I do not have the retirement mentality.

    Yes, that makes sense. If my bonds go nowhere or move a bit southward, I grin and bear it, for the sake of the month-end pay-out. Those amounts are not guaranteed, either, but they are consistently in the same neighborhood. One in the hand is worth two in the bush?

    ...Can't find that Weekend Update SNL clip just now. A birth control device implanted into a male's palm.

    As we've heard over and over, there's no single correct recipe.
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