| Wednesday, May 01, 2024 |
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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 |
| 04/24/24 | 5.38 | 5.43 | 5.37 | 5.16 | 4.93 | 4.79 | 4.66 | 4.66 | 4.64 | 4.89 | 4.77 |
| 04/25/24 | 5.38 | 5.41 | 5.39 | 5.21 | 5.00 | 4.86 | 4.72 | 4.73 | 4.71 | 4.93 | 4.81 |
| 04/26/24 | 5.38 | 5.40 | 5.38 | 5.20 | 4.99 | 4.83 | 4.68 | 4.68 | 4.66 | 4.89 | 4.77 |
| 04/29/24 | 5.38 | 5.40 | 5.37 | 5.19 | 4.97 | 4.81 | 4.64 | 4.63 | 4.61 | 4.84 | 4.73 |
| 04/30/24 | 5.38 | 5.40 | 5.39 | 5.24 | 5.04 | 4.87 | 4.71 | 4.70 | 4.68 | 4.90 | 4.78 |
The data in the table above is static as of the time it was pulled, so rates may have changed. Treat all data in this table and PMR as indications only and availability is always subject to change. This information was pulled manually from sources we believe to be reliable. New source, as of 12/12/2022, Bloomberg, L.L.P. As of: close of business 4/30/2024.
Mark Twain Was a Bond Salesman
In May 1897 Mark Twain was in London on a speaking tour. While there, a rumor spread that he was gravely ill. That rumor was followed by a second, more outlandish rumor that he actually died. It seems this “fake news” was picked up by an American paper which prepared his obituary. When Twain was told of this he quipped “The report of my death has been greatly exaggerated.” Perhaps if Twain were living today, he’d be compelled to repeat his quip as it pertains to high-grade bonds which are experiencing a price decline and some market watchers consider bonds to be a “dead market” for the while.
Two years ago, the Fed Chairman Powell initiated a historically aggressive rate hike campaign as supply-chain price pressures mounted (despite previously assuring investors that inflation was only “transitory”). In the following months, bonds declined precipitously in price and yields followed a dedicated path higher. October of 2022 and 2023 saw yield highs for the respective years. Then last November on news of a Fed monetary policy “pivot” which would end the streak of rate hikes, bond markets rejoiced as prices rose and yields fell nearly 1.25%. But since then, inflationary metrics seem to be “stickier” than expected and bonds have nearly retreated back to the Oct 2023 yield highs (and price lows). Along the way, a new chorus of praise for high yield private credit has risen over the din. In simple terms, private credit is fixed income which offers higher nominal returns than traditional government bonds and comes in various rating categories. Collateralized Loan Obligations (CLOs) are a good example of private credit.
We believe the fact that private credit is making such a splash at precisely the moment traditional/normal bonds are printing yield highs (price lows) is a subtle confirmation that the fundamentals are in order! Fundamentally sound fixed income portfolios are buying the same basic, liquid, well-understood and well trafficked high-grade government bonds they always have. While less disciplined investors who are more easily swayed by faddish distraction and portfolio ornamentation are inclined to look elsewhere and miss the obvious “buy low, earn high” signal. This is nothing new. But savvy investors have historically realized the appeal of high-grade bonds is continually in demand and delivers favorable total return and taxable equivalent yield properties. Even as inflationary concerns ebb and flow, investors’ preference for high-grade bonds will persist. And when the inevitable next leg in monetary policy pushes rates lower, demand for this time-tested asset class will abound.
So don’t wait. Attractive securities are offered, available and may be just what you’re looking for. Unlike the weather, of which Mark Twain said everyone complains but does nothing about, this is something you can act on right now.
Please call your CCB Capital Markets Rep for a full offering of top-quality bonds and further discussion.
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