February 2021 – Monthly Commentary

The bond market has struggled mightily of late with one unexpected “fire” flaring up after another, and despite demanding attention, the Federal Reserve has failed to act.   Of concern has been the downward trend in Treasury Bill yields over the last few weeks.  No one wants to see the yield for T-Bills go negative, but with the Treasury reducing supply temporarily to stay under the debt cap, the Fed buying in the secondary market and money market funds now effectively all government Bill funds, the yield has nowhere to go but down.