SGOV Stock Recent News

The Fed's new easing cycle is steepening the yield curve. 2s10s have dis-inverted. 3M yields could follow. The rare situation which made iShares® 0-3 Month Treasury Bond ETF so attractive is likely coming to an end.

The Federal Reserve's unexpected 50 bps rate cut signals aggressive monetary easing, aiming for a soft landing encouraged by benign inflation data. SGOV, the iShares 0-3 Month Treasury Bond ETF, will see its yield decrease in line with Fed rate cuts due to its low duration. SGOV remains a robust cash-parking vehicle with low volatility and no credit risk, but its yield will decline, prompting a 'Hold' rating.

iShares 0-3 Month Treasury Bond ETF remains a top choice for low-risk, liquid investments amid potential rate cuts. SGOV offers capital preservation, high liquidity, competitive yield, and tax efficiency, making it an attractive option for cash reserves. Historical data shows SGOV's yield adapts swiftly to Fed policy changes, outperforming traditional savings accounts and money market funds.

Although the Fed has held interest rates steady at the July FOMC meeting, weak economic data makes a September rate cut increasingly likely. The Fed will join global central banks as they embark on an easing cycle, potentially reducing interest income for SGOV investors. While SGOV remains a risk-free safe-haven asset, its attractiveness is diminished as its distribution yield is set to decline.

Treasury bills are attractive to value investors due to good returns and lower interest in main companies in indices. SGOV ETF offers over 5% yield, tactical stock market exposure possibility, and low volatility. Stock indices are structurally important, but caution could be used due to high valuations and potential corrections.

The significant decline in April and May services inflation and revolving consumer credit growth indicate demand-driven disinflationary patterns. The labor market appears to be facing a typical recessionary trend: a lower number of full-time workers (without second jobs) compared to the total working-age population. Job growth may be strong, but that is primarily driven by a rising need for part-time jobs to offset lower real disposable household income.

SGOV: If The Fed Cuts Rates, An Interesting Yield Play For Some Time

The iShares 0-3 month Treasury Bond ETF invests in treasury bills. With inflation stubbornly high, the prospect for Fed rate cuts have dimmed considerably, which is a positive for SGOV as investors can earn high treasury bill yields for longer. I am raising SGOV back to a buy and believe it remains the best 'cash' asset to hold until further notice.

Predictions of rate cuts by the Federal Reserve have decreased due to low unemployment and signs of an inflationary rebound.

Conservative investors have been favoring the iShares 0-3 Month Treasury ETF, which pays out a yield of 5%+. With the Fed proclaiming "peak rates" this month, the future of rates is uncertain and likely lower. Lower future rates make fixed-rate investments like CDs more attractive than SGOV if the Fed is to be believed.