Is it smart to buy treasury bonds?

Treasury bonds can be a good investment for those seeking security and a fixed interest rate that is paid biannually until the bond matures. Bonds are an important part of the asset allocation of an investment portfolio, as the consistent return on bonds helps offset the volatility of stock prices. Treasury bonds can be attractive because investors rarely get a guaranteed return. While they are not a long-term investment strategy or a way to generate wealth, short-term government bonds have some attractive use cases.

The Treasury website continued to fail as investors rushed to buy government bonds. Andrea Hsu hide subtitle And for good reason. In the investment world, Treasury bills would never be considered sexy. They would be technological stocks, cryptocurrencies or perhaps NFT.

Treasury bills would be those that wore sensible shoes, drove below the speed limit and bought at Costco. One bond in particular, the Series I savings bond, became so popular that potential buyers stormed the Treasury website last week (TreasuryDirect, government, where you can buy the bonds). What's going on? What happened to government bonds to make them attractive? U.S. government bonds are considered to be one of the safest investments in the world, with virtually zero risk.

Until recently, I think “boring” would be an entirely accurate word to describe Treasury bonds, Leondis said. And for most people, it's not worth taking a look at because the rates were incredibly low. That is, less than 1%, more or less. TikTok, Instagram and YouTube are full of financial advisors who instruct people to go to the Treasury website as soon as possible and buy the bonds.

Also NPR reporter Andrea Hsu and I decided to take this advice very seriously. We plan to pool our own money and default on bail. Words that have literally never been used to describe U.S. government bonds.

Normally, you don't want government bonds to be attractive or to pay a lot of interest. In general, government bonds only pay a lot when an economy seems unstable or is on the verge of collapse, and for that reason, investors hesitate to buy those bonds because there is a very real risk that the country will not be able to repay them. But that's not what's happening here, said David Enna. That's the reason for all of this.

The Federal Reserve, as part of the COVID stimulus, bought billions of dollars worth of government bonds every week (it was a way to keep money flowing through the economy). The Federal Reserve has largely stopped doing so, leading to a fairly sudden and quite significant drop in demand for government bonds. Andrea Hsu and Stacey Vanek Smith react when the Treasury Direct website crashes, just as they process the purchase of their bond. Andrea Hsu hide caption At 9 p.

M. “I don't have so much hope anymore,” said Andrea. I said round and round, referring to the spinning wheel that my browser shows when loading a page. I think the ties have broken me.

. According to Bloomberg's Alexis Leondis, the current payments that government bonds are offering to investors could be closer to normal than we've seen in years. He states that the last ten years in which U.S. government bonds have paid almost nothing are probably an abnormal situation.

In addition, years of almost unprecedented interest rates have essentially punished people trying to save money. “I've been saying for a long time that savers have suffered a lot with the Federal Reserve,” said David Enna, a bond watcher. Enna said that having a safe place to deposit money where there is a guaranteed return is like a lifesaver for people on a tight budget, especially since inflation reduces the value of our money. It's very important for a lot of people, especially for retirees who have to stick with cash.

Andrea Hsu and Stacey Vanek Smith were able to buy their bail at 10 p.m. Stacey Vanek Smith hide caption Where is a velvet rope when you need it?. .