Interest Rates, US Treasury Bill Yield Chart, Technical Analysis

Interest Rates - 13 Week T-Bills Comment Archive

The T Bill yield chart shows an index, which, divided by 10, is equivalent to the current 13 Week Treasury Bill Yield.

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Another Breakdown (2/25/01)
Lest anyone doubt whether the Fed is in the process of cutting rates, the daily chart below should make it absolutely clear.

Breather (2/3/01)
The heavy droppings slacked off a little on Friday. Seems we're due for some leveling off in the Fed's problem load dropping. This is probably only temporary, as the objective of 4.25% remains unmet.

Breakdown (1/31/01)
Short term t-bill rates broke to a new low in advance of the fed's cut, and are headed straight for the objective of 4.50% which Dr. Stool recognized on January 5. (See below.) Dr. Stool continues to feel that the extraordinary nature of this drop is a sign of the trouble we're in.

Back Test (1/19/01)

The T-bill yield index is headed back to test the low. The economy is imploding. A breakdown in this index confirms that we're in big trouble.

Whoa! (2/11/01)
How bizarre is this? The smell of fear is in the air. They're mashing the accelerator now. Yields are headed for 5% and at this rate, it won't take long. This is a classic buying panic, as the world tries to unload equities.

Backed-up (2/3/01)
Intraday stochastics up signals on Thursday afternoon led to a mild backup Friday. The measuring objective on the index is 55.20 or 5.52% on the upside.

The downside objective had been 54.20 for the short term move. That was reached on Thursday. There should be some more backing and filling here as the Deflationites argue the outlook with the Inflationistas.

Dr. Stool says that until there is evidence that the powerful long term downtrend has reversed, he will remain a Deflationite. Deflation is great for bonds but disastrous for stocks.

Back Test (1/19/01)

The T-bill yield index is headed back to test the low. The economy is imploding. A breakdown in this index confirms that we're in big trouble.

A Little Bit of Uptick (1/14/01)
Looks like someone doesn't want the bill to trade below 5% for the time being. Although the charts don't indicate anything significant in that, yet, Dr. Stool thinks that it might be. This index is pretty good at telling where Fed policy is going to be headed, weeks ahead of time. Dr. Stool is speculating that if this index trades outside of the 4.95-5.25 range, that would be a sign that a financial storm is gathering. Rising above the range could signal a crisis in confidence in the dollar, and hyperinflation, whereas a further significant decline strengthens the case for a worsening economic picture with real deflation.

Fed Has Pedal To Metal (1/5/00)

The emperor finally noticed that Rome is in flames, so he put down his fiddle and declared that it should stop burning. The inhabitants, who had long awaited this move, decided that the fire would go out. But the inhabitants did not see that the fire was growing, and would not die easily. Was the emperor buck nekkid?

Ok so the Fed woke up. They are pumping like mad now. But they are way behind the curve. Consumers have curled into a fetal position, and the corporate sector is headed for insolvency faster than you can say, "Buddy can you spare a dime?"

It's not news that short rates are collapsing. Economic demand is collapsing. Crash follows mania, as night follows day. It remains to be seen whether the lender of last resort can soften the landing. The evidence of history suggests that it cannot. Maybe this time will be different, maybe not.

The initial downside objective in the T-Bill rate was 5.45% to 5.50%. With the break, the new objective is now 4.5%. At this rate we'll get there in 15 minutes. These wild day to day fluctuations are symptomatic of crisis in capital flows.

Our financial system is teetering on the brink of instability, with all kinds of conflicting indications coming from commodities, energy, financials, and Treasuries. There's something under the surface, and it's the Loch Ness monster. Manufacturing and auto sales data released over the last two days show a colossal collapse in demand, and the huge California utilities cannot pay their bills.

Our financial system is careening downhill. It's impossible to say how this is going to work out. To some extent, it depends on foreign holders of US assets. If they decide it's time to get out, there's going to be chaos. The dollar is tanking. Doesn't look good.

Stepan N. Stool PH&D

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