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Tuesday, April 10, 2018

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty
Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer
 Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell • Gus Koppen

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
4/3/18 1.70 1.75 1.92 2.09 2.28 2.41 2.60 2.73 2.79 2.90 3.02
4/4/18 1.67 1.71 1.90 2.07 2.28 2.42 2.61 2.73 2.79 2.91 3.03
4/5/18 1.67 1.72 1.93 2.07 2.30 2.45 2.64 2.76 2.83 2.95 3.07
4/6/18 1.68 1.73 1.91 2.06 2.27 2.40 2.58 2.70 2.77 2.89 3.01
4/9/18 1.67 1.76 1.93 2.08 2.29 2.43 2.60 2.72 2.78 2.89 3.02

                                                                                      Source: U.S. Department of the Treasury, as of 4/9/18  


Is your portfolio prepared for the next 30+ years?
 
As bankers we often get bogged down in the day to day, so today’s PMR is a reminder of the cyclical nature of interest rates over the “long term”.
 
We have managed our bond portfolios in a Bull market, as it relates to Treasuries, for the past 37 years (meaning higher prices/lower yields).  This bull market has effectively allowed us to make mistakes.  As long as the mistakes were long enough, time would heal our price depreciation wounds.  Those days may soon be behind us.
 
We are not sounding the alarm, however we are initiating a test of the emergency BONDcast system.  Although it may take some time for the economy to build steam, the cyclical nature of interest rates would suggest that we are on the front end of a long term bear market in Treasuries (meaning lower prices/higher yields).  Is your portfolio prepared? 
 
This week we will focus on “plain vanilla” bond structures that will provide two of the most important characteristics necessary to combat a rising rate scenario; Cash Flow and/or Limited Price Depreciation.



 

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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