Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

Are T Bills Y2 K Insurance?

News: Analysis & Commentary: Finance

Are T-Bills Y2K Insurance?

Investors brace for the bug by buying short-term Treasuries

Forget about stockpiling batteries in the basement. Now there's another commodity to stow away to get you through the turn of the millennium: short-term Treasury bills. Investors who want some extra protection--even if the global financial system doesn't melt down at the stroke of midnight on Dec. 31, 1999, as some Cassandras predict--are stockpiling T-bills just in case. "There's a basic presumption in the market that if the U.S. government isn't Y2K compliant, no one will be," says Neal M. Soss, an economist at Credit Suisse First Boston in New York.

Demand for the six-month T-bill is so heavy, it's pushing up prices. Yields, which move in the opposite direction of price, fell 44 basis points, to 4.70% during the first two weeks of July--taking a bigger plunge than other bonds, including one-year Treasuries (chart). Such a large move in a short period of time demonstrates that Y2K concerns are growing, says John E. Silvia, chief economist at Kemper Funds in Chicago.

Investor worries may be misplaced. U.S. regulators are optimistic that banks and other financial institutions will have their systems ready to usher in the New Year. Fed Governor Edward W. Kelley insists that the U.S. banking industry is "overwhelmingly ready." If he's wrong, investors who sought safety in Treasury bills will be prepared. Plus, the Fed has an extra $50 billion in cash ready to provide liquidity, just in case. No matter, investors will sleep better between now and Jan. 2, 2000.By Laura Cohn in WashingtonReturn to top

Return to top

blog comments powered by Disqus