This Congressman is Buying Bonds as Yields Continue to Surge

Congressman Tom Rice, who represents South Carolina's 7th congressional district, disclosed today that he bought U.S. Treasuries earlier this month.

Rice invested between $100,000 to $250,000 in U.S. Treasury Bill on September 19, according to filings. This marks Rice’s first trade since early 2020 when he was adjusting his investing portfolio during the COVID-19 pandemic outbreak.

In February and March of 2020, Rice was mostly trimming his stakes in some public companies, like General Electric (GE: US), Exxon Mobil (XOM: US), and InMode (INMD: US).

The yield on the benchmark 10-year U.S. bond hit a 14-year high earlier this week after topping 4%. It marked a rapid ascendance since the 10-year yield was trading below 3.5% on September 19, when Rice made his trade.

Bonds are falling in response to aggressive rate-hiking actions taken by the U.S. Federal Reserve as well as other major central banks globally. It is important to remember that bond yields and bond prices have an inverse relationship.

As a result, many investors and money managers now see bonds as an alternative to stocks, placing a major question over “TINA” - an acronym for "there is no alternative” to stocks. As such, stocks are falling with the benchmark U.S. Index S&P 500 testing year-to-end lows in the low 3600s.

Hence, it comes as no surprise that Congress and Senate members are increasing their exposure to U.S. Treasuries given more attractive yields. In June, Congresswoman Sara Jacobs disclosed she invested between $1 million and $5 million in bonds in late May.