Mar. 19 at 6:41 PM
Ouch, the 2-year jumps by 33 bps in a month as Powell signals "Higher for Longer" for the Fed Fund Rate. What this means is that those invested in the short-end of the Treasuries and Corporates, may face "slight" principal risks. If you're invested in ETFs like VUSB PULS MINT GSY JPST FLUD ICSH, and you're safety-conscious and want to maintain your principal, you might want to rejigger. Same for even those with Corp Float Rate Note (FRN) ETFs like
$FLOT $FLRN $FLTR and
$VRIG. The safest bet is to move to even shorter Treasuries:
$USFL and
$TFLO, with effective durations close to zero. That way, you're free from both the interest rate risk and credit spread risk, which could hit if private credit and PE exposure from software/tech exposure, hit. Usually, in recessions, a double whammy happens.
