Wednesday, May 9, 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
5/02/18	1.69	1.84	2.03	2.24	2.49	2.64	2.80	2.92	2.97	3.04	3.14
5/03/18	1.68	1.84	2.02	2.24	2.49	2.62	2.78	2.90	2.94	3.02	3.12
5/04/18	1.67	1.84	2.03	2.24	2.51	2.63	2.78	2.90	2.95	3.02	3.12
5/07/18	1.69	1.86	2.05	2.25	2.49	2.64	2.78	2.90	2.95	3.02	3.12
5/08/18	1.69	1.87	2.05	2.26	2.51	2.66	2.81	2.93	2.97	3.04	3.13

                                                                                      Source: U.S. Department of the Treasury, as of 05/08/18  

                                              

                   What Else Can Be Learned From the Yield Curves Over the Last Five Years?

 

It has not been profitable to stay short just “waiting for rates to go up”.  There are many good reasons to stay shorter such as liquidity needs, however, future income has been suppressed. 

 

For example, if in 2013 you said, “I’m staying out two years for a while waiting for longer (10, 30 years) rates to be higher so I can lock them in”, you would have theoretically earned an average of .96% for six years and then invested out longer at a pretty steady 3%, a 2% earnings difference over at least these six years.

 

So in a sense, you would have been right that rates were going up from 2013 and thus purchased a two year at .21% instead of a 30 year at 2.95% because the 30 year DID go up from there, but not enough to be ahead income wise over that period of time.

 

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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