2021/2022 were the years tech stocks blew up.

2023/2024 could be the years Treasury plays blow up.

It’s a ticking time bomb, and the Fed pausing rates could be the trigger.

Treasury Bonds have been the hottest investment this year.

Assets held in money-market funds (investments like treasuries) grew from $4.5T at the start of the year to $5.5T — the highest ever.

• The cycle has been: Fed raises rates → treasury yields rise → investors pile in.
• The average yield has risen to a juicy 4.6% — without dealing with the market’s volatility.

But just as rising Fed rates sent money-market yields up, a pause or potential rate cuts could send yields back down.

How long will the Treasury party last?

That depends on the Fed’s plans for rate hikes. They’re expected to raise rates again in their May 3 meeting.

Apollo Global’s chief economist thinks these yields will stay elevated for at least several months (WSJ).

• But “let’s be totally clear, this will all blow over at some point.”
• “For risk-willing investors, there are a lot of things that are a lot cheaper today than where they were six or 12 months ago.”

The S&P 500 and the NASDAQ have outperformed Treasuries since last year’s end. And riskier assets like stocks could extend their lead when the Fed does flip the switch.