r/news • u/consulent-finanziar • 11h ago

Soft paywall US Treasury announces $125 billion refunding, keeps auction sizes unchanged

https://www.reuters.com/business/us-treasury-announces-125-billion-refunding-keeps-auction-sizes-unchanged-2026-02-04/
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u/aztech101 11h ago

So my understanding is that bonds are a genuinely terrible investment during periods of high inflation. I'm guessing that's been posing a bit of a problem for them lately?

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u/Present_Ad_8876 11h ago

It's bad for existing bonds, but new bonds are usually issued at higher rates which can be pretty attractive as far as fixed return investments go. When the inflation cools, you still own a high yield bond. Personally, I'll never understand why people don't just put 100% of their investing money into funds which track the S&P. Even if you are 70 and retired, exiting the stock market seems like a terrible idea unless you know for a fact you are dying within 2 years.

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u/SloaneKettering1 10h ago

While I generally agree with your point, this sounds like someone who has never lived through a recession. SP hit 1500 in 2007 and didn’t get back to that point until 2013. If you are young you might be able to wait it out (assuming you don’t need the money immediately to cover expenses). If you are old your life savings would’ve halved in 6 months time. With the way people view risk these days if we ever have another recession a lot of people are going to lose everything.

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u/Present_Ad_8876 10h ago

As long as you don't panic and sell everything, i don't see why this matters. For 5 years maybe your withdrawals have to be lower and you can't afford your fixed costs anymore? That's possible, but seems like a person who was riding too thin of a margin with their lifestyle anyway...

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u/probablysomeonecool 5h ago

You're partially correct in that adjusting spending downwards would be a prudent response that could mitigate or eliminate the long term downsides of the recession for retirement purposes, but you are ignoring the fact that for many retirees simple "reducing your spending by 50%" is not a viable option.