There is more and more evidence that retail traders are increasingly more inclined to trade bonds. For the first time in history, retail traders have access to trading Treasuries while interest rates are at higher-than-usual levels. 

Instead of investing in risky assets, like stocks, the FED’s most aggressive rate-hiking campaign in decades pushed bond yields to 15-year highs. This has allowed investors to securely park their cash as bonds now offer a higher yield than even the most attractive saving accounts.

Strong Retail Interest in Short-term Debt

It’s never been easier to get exposure to Treasuries, either buying them directly through the Treasury Department, brokers, or ETFs. T-bills, a short-term U.S. government debt obligation with a maturity of one year or less, are also exempt from state and local taxes.

“For pretty much the entire decade, leading up to this year, when people asked about retail and fixed income, I could just simply say, ‘no one really cares.’ The past year, that has significantly changed,” Shawn Cruz, Head Trading Strategist at TD Ameritrade, told Yahoo Finance.

Treasury bills sales broke the record in January after attracting inflows of $12 billion.

A chart from Yahoo Finance representing values regarding buying pattern of retail interest surges.According to the retail trading platform, which allows traders to buy Treasury bills, its users have invested more money in Treasury bills than in other assets, including stocks and ETFs.’s data shows that traders have invested more in T-bills than any other asset on Public, including popular stocks like Apple (AAPL:US) and Tesla (TSLA:US). As of May 8th, 2023, the yield for a 26-week T-bill is 5.11% when held to maturity, according to

“The median amount invested in T-bills has also been 10x greater than investments in stocks and ETFs, and since launch, one-third of all new members have invested in T-bills. For the first time, we’re seeing investors link their savings accounts instead of their checking accounts to Public, moving larger sums of money into T-bills to lock in the currently high, fixed yield,” the company said in a blog post.

Congress Members Are Also Buying Treasuries

Blackrock’s U.S. iShares fixed-income ETFs attracted as much as $9.9 billion in the opening two months of 2023. BlackRock (BLK:US), the largest provider of ETFs by assets, said the most popular investment in February was the iShares Short Treasury Bond ETF.

“Having rates as low as they were for as long as they were was kind of the aberration. I think we’re resetting back now to a  much more normal fixed-income environment, and the great thing for investors, as a result, is they can use it to generate income, and so for retirees or people looking at their wealth portfolios, they’re able to generate good, long-term income from long-term investments like Treasuries or investment grade,” said Salim Ramji, Global Head of iShares and Index Investments at BlackRock.

Hence, it also comes as no surprise that Congress members have also followed retail in buying government debt. There aren’t that many transactions involving Congress members and Treasuries in 2020 and 2021, which is understandable given that rates were still low back then.

The activity started to pick up in the second half of the last year when it was evident that the FED won’t stop raising rates until it is sure that inflation won’t be going back up. 

Representatives like Scott Peters, Suzan DelBene, Dan Bishop, Doris Matsui, Kevin Hern, Blaine Luetkemeyer and Michael McCaul all reported higher-than-usual trades involving U.S. Treasuries. 

For instance, Mr. Luetkemeyer, the U.S. representative for Missouri's 3rd congressional district, reported in March that he was investing millions in U.S. Treasury Notes in November and December last year. 

Similarly, Representative Kevin Hern from Oklahoma was trading Treasuries in February and March, similar to Ms. Matsui. 

Most recently, Congress members DelBene and Peters were both buying T-bills in late April in transactions valued at over $500,000.

Closing Thoughts

Retail investors and Congress members are increasingly more inclined to buy short-term U.S. Treasuries given the high-interest rates set by FED. As of May 12, the effective Fed funds rate - a target rate set by the Fed for banks - was 5.08%

It is expected that this interest will remain high as long as the FED keeps interest rates as high as they are now. The market is currently pricing in the FED cutting rates by 75 basis points before the end of the year and additional 85 basis points in 2024.

The lower interest rates are likely to decrease interest for Treasuries and allow for risky assets - like stocks or cryptocurrencies - to grow in popularity. However, sticker-than-expected inflation at levels of 4 - 5% or even above is likely to prevent the FED from cutting rates.