U.S. 3-Month Bill Auction 5.250% Vs 5.225% Prior; 6-Month Bill Auction 5.155% Vs 5.120% Prior
Portfolio Pulse from Benzinga Newsdesk
The U.S. Treasury saw an increase in the interest rates for its short-term debt instruments, with the 3-month bill auction rate rising to 5.250% from 5.225% and the 6-month bill auction rate increasing to 5.155% from 5.120%.
April 15, 2024 | 3:35 pm
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NEGATIVE IMPACT
The increase in U.S. Treasury bill rates may lead to a short-term negative impact on SPY as investors might shift towards the safety of higher yielding government securities.
Higher interest rates on short-term U.S. Treasury bills make them more attractive compared to riskier assets like stocks, potentially leading to a shift in investor preference. This shift can result in a decrease in demand for ETFs like SPY, which track the broader stock market, thus negatively impacting its price in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70