| Friday, July 21, 2017 | ||||||||
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MANAGING DIRECTOR: |
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US Treasury Market |
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| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 7/14/17 | .93 | 1.04 | 1.12 | 1.22 | 1.35 | 1.54 | 1.87 | 2.13 | 2.33 | 2.67 | 2.91 |
| 7/17/17 | .95 | 1.07 | 1.10 | 1.22 | 1.36 | 1.53 | 1.86 | 2.12 | 2.31 | 2.65 | 2.89 |
| 7/18/17 | .95 | 1.07 | 1.11 | 1.19 | 1.36 | 1.52 | 1.82 | 2.08 | 2.27 | 2.61 | 2.85 |
| 7/19/17 | .99 | 1.11 | 1.12 | 1.23 | 1.37 | 1.52 | 1.83 | 2.09 | 2.27 | 2.61 | 2.85 |
| 7/20/17 | 1.00 | 1.15 | 1.12 | 1.22 | 1.37 | 1.51 | 1.82 | 2.08 | 2.27 | 2.60 | 2.83 |
Source: U.S. Department of the Treasury, as of 7/20/17
Adjusting to Today’s Market
About a month ago we ran a short note on preparation for “lower rates”. We received some interesting feedback and, maybe surprisingly, most of it was positive. We have rolled down the curve a bit and the 10yr TN has remained steady, and is about 2.23% today, it was 2.21% when we ran the PMR. We are not making a definitive rate call but believe overnight funds is not the best investment decision. In fact, the best yield rewards are in the five to 15 year range.
As we always like to point out, if you have money to invest and have been trying to “time the market”, stop. Investing success is often a matter of repeated purchases at current yields. Worrying about a purchase today “going underwater” is a decision to forfeit income in overnight funds while missing the opportunity to pick up 100 or more basis points out on the curve. Fear should not be a component of your investing tool bag.
With this being said we recommend the seasoned 15 year FG J21377 outlined below. At the current pricing speed the projected yield is 2.02% with a duration of 3.7 years with 119 months remaining. Check out the cash flow which is extremely important (if you are worried about increasing rates). Call us if you any questions, or interest.
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.
•Not FDIC Insured •No Bank Guarantee •May Lose Value