US Treasury Market
Date	1 mo	3 mo	6 mo	1 yr	2 yr	3 yr	5 yr	7 yr	10 yr	20 yr	30 yr
10/24/19	1.75	1.67	1.65	1.59	1.58	1.58	1.58	1.67	1.77	2.08	2.26
10/25/19	1.73	1.66	1.66	1.60	1.63	1.62	1.62	1.71	1.80	2.10	2.29
10/28/19	1.74	1.65	1.65	1.60	1.64	1.64	1.66	1.75	1.85	2.16	2.34
10/29/19	1.66	1.63	1.64	1.59	1.64	1.65	1.66	1.74	1.84	2.15	2.33
10/30/19	1.61	1.62	1.62	1.59	1.61	1.60	1.61	1.69	1.78	2.08	2.26

                                                                                                                                                     Source: U.S. Department of the Treasury, as of 10/30/2019

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As expected, and built into the market, the Fed lowered the overnight rate by 25 basis points to a new range of 1.50% to 1.75% yesterday. They also signaled to the market to not automatically expect continued easing.

The Federal Open Market Committee altered its language slightly in its statement, dropping its pledge to “act as appropriate to sustain the expansion” while adding a promise to monitor data as it “assesses the appropriate path of the target range for the federal funds rate”.
“We believe monetary policy is in a good place,” Fed Chairman Jerome Powell was quoted as saying. Followed by this dagger to the rate doves, “We see the current stance of policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook”.

The long end of the Treasury market, which fears inflation, welcomed the news and rose in price over a point and a half. Equities took it remarkably well with most of the major indices up slightly.
As with previous cuts, there were two dissenters, both Eric Rosengren of Boston and Esther George of K.C. preferred to keep rates unchanged. As a slight sign of unity, St Louis Fed President was this time satisfied with this quarter point easing.  He had previously dissented hoping for 50 basis point reductions at the two previous meetings.

Fed fund futures have now priced in only a 1 in 5 chance of a quarter point cut at the next meeting on December 11^th.  Looks like future moves are truly data dependent.

As we have referenced the past few days in this space, we continue to find the best value in our markets with pass-through pools and intermediate to longer dated municipals.

Ask your CCB representative what might be the best fit for you.

 

This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

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