The Treasury sets January 29 for its first sale of floating-rate paper - $15B in 2-year notes. It's the first new security offering by the government since the introduction of TIPS in 1997.
The move comes as investors were reintroduced to the risk of rising interest rates for the first time in a while last year. Floating-rate investments saw plenty of interest, but options are mostly limited to riskier investments like bank loans (also called leveraged or senior loans; ETFs for these products saw plenty of inflows in 2013).
For now, the Treasury offering will be a niche product, and BAML says the biggest interest will likely come from money-market funds.
Amid the excitement for floating-rate debt, Treasury yields continue to dive in 2014, the 10-year off another five basis points today to 2.73%.
Treasury ETFs: TBT, TLT, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, SBND, ZROZ, TLH, IEI, DLBS, TYO, DTYS, VGLT, BIL, UST, SHV, TBX, UBT, TLO, VGIT, VGSH, GSY, SCHO, LBND, DTYL, SCHR, TYD, ITE, TENZ, TYBS, DTUL, TUZ, SST, FIVZ, DTUS, TBZ, DFVL, DLBL, DFVS, TYNS