Selected perspectives on world affairs, politics and society.
US Government Sold $907 Billion of Treasury Securities this Week. That’s a Lot of Paper. Yields Pulled Back
Most of these huge T-bill sales replaced maturing T-bills as T-bills are short-term in nature and need to be rolled over all the time. But not all.
T-bill yields eased across the board this week. They largely reflect the Fed’s policy rates (no rate-hike meeting) and market expectations of the Fed’s future policy rates. They can also reflect big shifts in demand. There was some of that, as the market shifted from the “AI trade” to the “safe-haven trade” with AI and chip stocks tanking left and right – oh poor Intel.
Treasury I Bond “Fixed Rate” Raised to 1.40%, Highest since 2006, for 5.51% Annual Combined Rate for Next 6 Months
I-bonds are an inflation-protected savings product that the Treasury Department offers exclusively on its website TreasuryDirect.gov. They’re not a speculative instrument. They’re not traded in the market, and they cannot be sold or bought through a broker. Purchases are limited to $10,000 per year per person or entity.
With both the interest and inflation protection added to the principal, the value of the bond grows with compounding. The fixed rate and the inflation compensation rate are figured on the accumulated value. So if this new bond purchased for $10,000 grows in x number of years to $15,000, that 1.4% fixed rate and the new inflation compensation rate at the time will be figured on the $15,000.
The Growth of the Vacant Housing Stock in the US, Q3 2026
Amid the current difficulties in selling a home (because prices are too high, and sellers loathe to cut them), homeowners have been shifting for-sale units to the for-rent market.
Over the past five years, vacant-year-round units for rent and for sale surged by 1.48 million units.
What the “Housing Shortage” of New Single-Family Homes Looks Like: Ballooning Inventories, Falling Prices, So-So Sales
Big homebuilders have to build homes because that’s their business, they cannot just pack up and leave when the market turns against them, they have to keep their businesses intact, they have stockholders and bondholders they need to make happy, they have to protect their credit ratings, and they have to work with prices and incentives to keep their sales volume up. And they’ve been doing that, even as sales of existing homes have collapsed.
This is the “Housing Shortage” that the housing industry ceaselessly promotes to create a fake sense of scarcity to manipulate up prices.
Mega and Large Investors Pull Back from Housing Market, Become Net Sellers, Small Investors Continue to Pile In
Clearly, small investors still think that buying rental properties after the home-price explosion from mid-2020 to mid-2022 is the eldorado, while the smart money has stepped back?
Small investors have been, and continued to be, the driving force. There are millions of them, each buying a home every now and then, but together buying up large numbers of homes and putting them on the rental market. But the figures here exclude small investors that do not use a corporate entity for their purchases, such as many mom-and-pop investors.
Treasury Market Gets to Breathe: AI Companies Front-Loaded Debt Sales and, Loaded with Massive Cash to Spend, Step Back from the Bond Market
Because of the conniptions in the bond market, SpaceX is going to the loan market (insurance companies, pension funds, loan funds, private credit funds, etc., around the globe) and that’s taking pressure off the bond market that the government has to rely on for its $2.2 trillion a year in Treasury sales.
SpaceX is #3 with $90 billion in cash and marketable securities as of September 30. Plus, it is now finalizing a $40 billion debt offering led by Apollo and Goldman Sachs. That would bring its cash hoard to $130 billion.
Long-Term Treasury Yields Buffeted by Hot Inflation and Cracks in AI Mania
Inflation is out of the bottle and has been accelerating for over a year, while the Fed has cut its policy rate last fall into this accelerating inflation. This is concerning because a purposefully lax Fed, that allows or encourages inflation to fester, is a nightmare for bondholders. Inflation eats up the purchasing power of bonds, and investors want to be compensated for that, plus some, with yield. A lax Fed is a reason to not hold bonds unless yields are high enough to compensate for those risks.
Bond investors haven’t seen those yields in over 20 years, and those yields seem tempting. But these are also iffy times for holders of long-term bonds.
The Social Security COLA for 2027 Will Be Largest since 2023
Because the applied COLAs are based on inflation data for July, August, and September of the prior year, they reflect past inflation. So in years when inflation surges, the COLAs, reflecting the cooler inflation in the prior year, lag behind and beneficiaries lose purchasing power. And in years when inflation cools, the COLAs, reflecting the hotter inflation in the prior year, catch back up, and recipients regain some of that lost purchasing power.
The COLA also applies to Supplemental Security Income (SSI) payments.
The archive preserves what people said at the time. Older views and forecasts are not presented as current statements. Context provides supporting details; Read opens the source.