The 10-year note, for instance, yields 3.4% The one-year T-Bill has one of the higher Treasury yields. Investors now can get a rate of 3.18% on the three-month T-bills, 3.78% on six-month T-bills and 3.92% on one-year bills, according to Bloomberg. Based on the CME FedWatch tool, bond-market participants are anticipating that the Funds rate will top 4% by year end. An increase of 0.75 percentage point is expected at the Fed’s next meeting of policy makers next week. The rise in rates on short-term securities and funds reflects the Federal Reserve’s move this year to lift the key fed-funds rate to a current range of 2.25% to 2.5% from near zero. Apple had $179 billion of cash and equivalents on June 30 while Microsoft had $105 billion and Alphabet, $125 billion (including marketable securities). The income from Berkshire’s cash holdings now is running at a $3 billion-plus annual rate, up from nearly nothing in 2021 when T-bill rates hovered just above zero. A risk-averse Berkshire CEO Warren Buffett prefers to keep the bulk of Berkshire’s cash in T-bills. Other beneficiaries from higher short rates are cash-rich companies likeīerkshire, for instance, was sitting on more than $100 billion in cash and equivalents, including about $76 billion in Treasury bills, at the end of June. government, which is paying more on its borrowings. The added income on the enormous pool of money-market funds and other short-term bond assets also could provide a lift to the economy. While consumer prices have risen 8.3% in the past year, the most recent monthly readings have been close to zero. Savers may finally get positive inflation-adjusted yields in the coming year. The rate rise helps formerly yield-starved savers who have suffered for most of the past decade and a half with sub-1% short-term yields.
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