| Wednesday, March 22, 2023 |
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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 |
| 03/15/23 | 3.92 | 4.66 | 4.62 | 4.06 | 3.89 | 3.79 | 3.55 | 3.53 | 3.45 | 3.77 | 3.64 |
| 03/16/23 | 3.86 | 4.66 | 4.85 | 4.47 | 4.16 | 4.00 | 3.73 | 3.69 | 3.58 | 3.86 | 3.70 |
| 03/17/23 | 3.80 | 4.40 | 4.65 | 4.19 | 3.84 | 3.72 | 3.50 | 3.50 | 3.43 | 3.79 | 3.63 |
| 03/20/23 | 4.22 | 4.59 | 4.79 | 4.36 | 3.98 | 3.82 | 3.59 | 3.57 | 3.49 | 3.84 | 3.66 |
| 03/21/23 | 3.95 | 4.67 | 4.91 | 4.59 | 4.17 | 3.98 | 3.75 | 3.70 | 3.61 | 3.91 | 3.73 |
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, LP. As of: close of business 03/21/2023
Portfolio Floatation Devices Are Always in Style
Today the Fed concludes its regular two-day session and is most likely to raise rates by 25bps. Consensus estimates are ~80% for today’s increase followed by a 50% expectation of another 25bps increase in May. If this proves correct, the top end of the overnight range will be 5.25% which is 500bps higher than where it began in March 2022. Of course, the magnitude of this rate change over a relatively short timeline has produced difficult outcomes (which current headlines attest to daily). Investors have many questions. Foremost is will the Fed give pause to raising rates and, if so, what does that signal? Many feel the Fed needs to gauge the effects of a year-long fight against inflation before making further moves. Yet, the job market continues to be strong (amid layoffs) and inflation is still well above the Fed’s target rate of 2%. But does another rate hike weaken the same banking sector which the Fed hoped to stabilize with recently announced funding programs and deposits protection? Policy makers may have dueling objectives which prove difficult to reconcile. But, amidst the drama, it seems we always end up with a flight to quality. Recent price/yield action on the 2yr Treasury demonstrates this well. After beginning the year in the shadow of 4% then zooming north of 5% by the first week of March, the 2yr currently trades near 4.15%, virtually back where it started! Who saw this coming? It’s a cautionary tale which reminds us that simple/liquid/high quality assets are essential to our balance sheets and to invest regularly versus trying to time the market. When the need arises, there’s no substitute for fully liquid, explicitly traded high quality bonds. Make sure you have this portfolio flotation device before the water starts to rise.
Please reach out to your Country Club Bank representative with questions. Remember, we are a community bank first and we are having the same conversations that you are having in your daily discussions. If we can be of help, we will do our best to try.
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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