Jerome Powell testified before Congress today and while he had a lot to say the key problem is that inflation continues to rage on throughout the economy. Ultimately, JPOW said interest rates would “likely be higher” than originally expected.
The 2 Year US Treasury breached 5 percent on March 7 and other Treasury rates have made new highs:
We’re now heavily invested in short term T-bills over equities. The reason for short term T-bills is because we expect short term rates to go higher as the Fed hikes on March and likely in May but we are also aware of the threat of a default so we’re being pragmatic and most of our T-bills mature in May.
In May, we’ll re-evaluate the situation and make a determination to move forward or pick up discounted equities or sell naked puts into the future to pick up equity investments at the price we want.
In the meantime, stay tuned, stay profitable and stay solvent…