zgic said

Does RBC Direct Investing Offer US Treasuries?

Am I better off moving from ISA to US Treasuries as they will offer better yields? USD ISA currently offers 3.40%

I don't know if RBC Direct Investing offers US treasury bonds in its bond inventory or not.

BMO InvestorLine does. One can get a bit better than 3.4% at BMO InvestorLine through US treasury bills 69 days or longer:

RetirEd said
norman1: BAIL-IN - so are these what we used to know as "convertible bonds?" Or are the conditions more restrictive?

No, the bail-in bonds are different.

Convertible bonds are bonds that can be converted to shares, at the choice of the bondholder.

Bail-in bonds can be converted to common shares, at the choice of the issuer, against the wishes of the holder, after a triggering event. For example, after OSFI has declared the issuer to be no longer a viable bank.

RetirEd said
norman1: BAIL-IN - so are these what we used to know as "convertible bonds?" Or are the conditions more restrictive?  

“Bail-in” is a recent term to me. It means any product where the issuer does not have to give you your money back if they get into financial trouble.

Norman1 said

zgic said
…
Wow this is all greek to me. Looks like my Bonds' knowledge is 0.
I have to learn and understand a lot before I even think of these bonds like BAIL-IN what is it? Available Qty?

The BAIL-IN indicator means that the bond is from a Canadian bank and the bond has fine print that allows Canadian regulators to convert the bond to common shares of the bank under certain conditions. See Bail ins for a previous discussion about this.

Available Quantity is the quantity of the bond BMO InvestorLine has in its bond inventory to sell.

…
Today, If I go to CNBC I can see a US Treasuries chart with yields: Can I buy these today at these rates in Canada? If yes can you give me a link to a US 6-Month?

Unfortunately, no. Those are indicative wholesale yields, no commissions included.

In reality, BMO InvestorLine offers US Treasury bills maturing 03-OCT-2024 (in 177 days) at 97.647 (including commissions) for a yield to maturity of 4.9%. That is less than the 5.33% quoted by CNBC for six-month US Treasury bills.  

@Norman1: I am currently holding all of my USD Cash in Renaissance USD High Interest Savings Account USD-Series F ATL5075 with Questrade. Will have to find out if they offer US treasuries.
Does RBC Direct Investing Offer US Treasuries?
Am I better off moving from ISA to US Treasuries as they will offer better yields? USD ISA currently offers 3.40%
Thanks

dentgal said
For what it's worth, my ex husband is a tax lawyer. He also said that interest rates are at their lowest at the time of a US election, so we timed our mortgage renewals to coincide with US election year.  

I hear many claims like this. But when you use AI, it can check the historical record going back 30 or more years.

I believe that was what happened here. Those are facts—or at least, they are facts that can be checked. I asked the AI whether the statement was actually true: that interest rates are at their lowest during U.S. election years.

The answer was no, and it provided the chart I posted to demonstrate that.

The point is that, when you're looking at something that happened in the past, all the relevant factors are already known. The AI doesn't have to predict anything—it just has to check the historical record and see whether the claim holds up.

So, if the person who told you this is a lawyer, that's fine, but being a lawyer doesn't make the statement a fact. In this case, the historical data simply doesn't support the claim.

dentgal said
For what it's worth, my ex husband is a tax lawyer. He also said that interest rates are at their lowest at the time of a US election, so we timed our mortgage renewals to coincide with US election year.  

Well, seeing what global bond markets have been doing recently, I would not be too sure of that occurring this time. All bets are off.

AltaRed said
Obviously I have do not know but I suspect overnight rates will be slightly higher a year from now. Whether that means across term deposits out to 5 years (GICs) or 10 years (bonds) is anyone's guess. I make no guess and I do nothing but 'stay the course'.  

But I would like to know your rationale for thinking that, so I can see if it looks better than my reasoning. You do not believe that Donald Trump will have less power after the midterms, and that this will alleviate inflationary pressures and lower interest rates?

Why would they be higher a year from now?

And the midterms will have an effect on policy if the Democrats win.

this stament is it true Historically, US interest rates have tended to be at a low point in their cycles near US elections

Midterm 12 mo. before Election Nov. 12 mo. after Before → Election Election → After
1958 3.28% 2.27% 4.00% ↓ 1.01 ↑ 1.73
1962 2.61% 2.94% 3.00% ↑ 0.33 ↑ 0.06
1966 4.10% 5.76% 4.13% ↑ 1.66 ↓ 1.63
1970 8.85% 5.60% 4.91% ↓ 3.25 ↓ 0.69
1974 10.03% 9.45% 5.22% ↓ 0.58 ↓ 4.23
1978 8.45%* 9.76% 13.18% ↑ 1.31 ↑ 3.42
1982 13.31% 9.20% 9.34% ↓ 4.11 ↑ 0.14
1986 8.05% 6.04% 6.69% ↓ 2.01 ↑ 0.65
1990 8.55% 7.81% 4.81% ↓ 0.74 ↓ 3.00
1994 3.02% 5.29% 5.80% ↑ 2.27 ↑ 0.51
1998 5.52% 4.83% 5.42% ↓ 0.69 ↑ 0.59
2002 2.09% 1.34% 1.00% ↓ 0.75 ↓ 0.34
2006 4.00% 5.25% 4.49% ↑ 1.25 ↓ 0.76
2010 0.12% 0.19% 0.08% ↑ 0.07 ↓ 0.11
2014 0.08% 0.09% 0.12% ↑ 0.01 ↑ 0.03
2018 1.16% 2.20% 1.55% ↑ 1.04 ↓ 0.65
2022 0.08% 3.78% 5.33% ↑ 3.70 ↑ 1.55

The US republican party is all about wealthy people not paying taxes. This is aligned with their push for tariffs, which are regressive consumption taxes, coupled with regressive income-tax cuts. It's a classic "take from the poor and give to the rich" scenario, from the era of the "trickle-down" argument that has led to huge government debts and astonishing concentration of wealth.

This upcoming midterm is really on a knife-edge in terms of what's coming, but it will quite likely be followed by higher central bank rates. Wars don't help. The bond market seems to be expecting this.

AltaRed said
I tend to agree with you the behaviour of the Trump administration is to create more tailwind to inflation and cause it to accelerate while at the same time brow beating the Fed to decrease, or at least hold, interest rates. Asset inflation is what the billionaires, including Trump, ultimately want to the detriment of the common man.

I believe the bond markets are now realizing it and are demanding higher yields to take on a higher probability of higher inflation. Bond yields have mostly moved upward since Warsh became Fed Chairman on the belief he will more likely bend to Trump's demands.....but he has been remarkably steady so far. He is also only one vote on the FOMC.

My take is Warsh will not risk runaway inflation but will be reluctant to push it lower than the current ~3%. Hence deposit rates will reamin higher than inflation but real rates after tax will be less. That makes borrowing continue to be 'cheap'. I don't think mid-terms will have any real impact even if the Dems take over Congress. The Administration has a lot of power, especially this Administration populated with bullies and billionaires.  

It is about the midterms. If Trump’s power is diminished, then some of the inflationary pressures may be reduced, perhaps because he could be forced to withdraw from bombing Iran and there could be some tariff relief.

If that seems likely, is it not also likely that we are seeing a peak in interest rates around now, or perhaps around the US midterms?

Is this a buying opportunity now, or do you think rates will be higher a year from now?

I believe the bond markets are now realizing it and are demanding higher yields to take on a higher probability of higher inflation. Bond yields have mostly moved upward since Warsh became Fed Chairman on the belief he will more likely bend to Trump's demands.....but he has been remarkably steady so far. He is also only one vote on the FOMC.

My take is Warsh will not risk runaway inflation but will be reluctant to push it lower than the current ~3%. Hence deposit rates will reamin higher than inflation but real rates after tax will be less. That makes borrowing continue to be 'cheap'. I don't think mid-terms will have any real impact even if the Dems take over Congress. The Administration has a lot of power, especially this Administration populated with bullies and billionaires.

AltaRed said
Increasing government deficits are inflationary and the US bond market in particular has been seeing substantial increases in yield. Bond markets in other OECD countries tend to follow, partly as currency support and partly because so many other OECD countries also have increased deficits.

GIC rates are simply a reaction to the 5 year bond. As to why TD is competitive, it is hard to know other than they appear to have a need for deposit funds relative to other sources of funding and are willing to pay to it.  

This is about more than rising debt. It also involves the Fed, which in the U.S. has chosen to be less transparent than at other times in the recent past, increasing risk.

Do you think there have been some behavioral changes in the U.S. as well?

And then there is the effect of tariffs, which bring up the cost of goods and contribute to inflation. The economic theory that Howard Lutnick has subscribed to in the U.S. is not mainstream. His view that tariffs do not create inflation is certainly outside the conventional economic consensus.

These factors, as well as what you have said, have increased risk and therefore led to higher rates.

How large do you think the gap between interest rates and inflation will get?

I think that after the midterms, Donald Trump’s wing will be clipped, and that may lead to lower rates. But there is a lot of runway between that point and today, provided we do not see core inflation rise rapidly.

What do you think?