Floating Rate Treasury Notes Are Priced To Beat Inflation

Nov. 30, 2022 10:05 PM ETTFLO, USFR7 Comments
Louis Kokernak, CFA profile picture
Louis Kokernak, CFA


  • The short end of the treasury yield curve now yields over 4%.
  • Forward inflation expectations are below 3%.
  • The Treasury's Floating Rate Notes have very low duration risk.
  • Floating Rate Notes now comprise a significant fraction of outstanding Treasury debt.

government check


The Federal Reserve adopted a remarkably hawkish policy in 2022. The rapid ascent of interest rates has generated some investment opportunities in the fixed income space. Moreover, the treasury yield curve is more inverted now than at any

Volatilities of key asset classes

Yahoo! Finance

90 Day Treasury Rates

St. Louis FED, FRED

Breakeven 5 year inflation rate

St. Louis FED, FRED

Differnce between FRN yield and expected inflation

St. Louis FED, FRED

This article was written by

Louis Kokernak, CFA profile picture
I have been a fee only financial advisor since 2002 and am a Chartered Financial Analyst and Certified Financial Planner. The cornerstone of the life savings strategy at Haven Financial Advisors is the investment in multiple asset classes with low cost and low turnover.The investment process is transparent.There are no "black box" funds or sudden swings in risk taking.

Disclosure: I/we have a beneficial long position in the shares of USFR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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