Wednesday, September 14, 2022 |
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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 |
| 09/07/22 | 2.30 | 3.07 | 3.42 | 3.60 | 3.45 | 3.50 | 3.37 | 3.35 | 3.27 | 3.67 | 3.42 |
| 09/08/22 | 2.57 | 3.06 | 3.44 | 3.60 | 3.48 | 3.54 | 3.39 | 3.37 | 3.29 | 3.69 | 3.45 |
| 09/09/22 | 2.57 | 3.08 | 3.52 | 3.67 | 3.56 | 3.61 | 3.45 | 3.42 | 3.33 | 3.71 | 3.47 |
| 09/12/22 | 2.62 | 3.17 | 3.56 | 3.70 | 3.58 | 3.60 | 3.47 | 3.45 | 3.37 | 3.76 | 3.53 |
| 09/13/22 | 2.55 | 3.28 | 3.75 | 3.92 | 3.75 | 3.75 | 3.58 | 3.53 | 3.42 | 3.75 | 3.51 |
Source: U.S. Department of the Treasury, as of 9/13/2022
CPI FYI
The recent Consumer Price Index (CPI) was announced higher than what the market expected. The estimate for CPI year-over-year was 8.1 percent while the actual calculation came in at 8.3 percent. Just one year ago, CPI year over year (YoY) was 5.3 percent and hit a 15 year high. This recent jump in inflation has solidified some expectations that the Fed will need to move 75 basis points on the 21st of this month while others are calling for a 100 basis point move. Additionally, as of September 13, 2022, the 2-year treasury hit 3.74 percent intraday, which is a solid 25 bps move in just one day. It is fair to say the market has now fully priced in a move by the Fed of 75 bps next week.
While the talk remains about hot inflation, traders in the industry are seeing the top-end Fed rate near 4.3 percent, but are also anticipating the Fed needing to ease their policy before year-end 2023. This wild swing is likely to keep markets in a volatile state. With the sudden swings and predictions of higher rates in the months to come, we are easily mesmerized by higher rates on the shorter end of the curve. However, we believe the shape of the yield curve is creating a trap to get you to stay short with your investments. While we don’t know exactly when this ride is going to start its journey lower, we do believe that based on market technicals, we appear to be nearing the top.
For those of you who have made the tough decision to participate in the market by dollar cost averaging, your portfolio yields and performance have been providing some reward. For those of you who have been reluctant, now is an opportunity to consider options for the future of your investments while adding positive spread to your portfolio. If you have questions or just want to discuss the markets and options for your bank, please reach out.
While the talk remains about hot inflation, traders in the industry are seeing the top-end Fed rate near 4.3 percent, but are also anticipating the Fed needing to ease their policy before year-end 2023. This wild swing is likely to keep markets in a volatile state. With the sudden swings and predictions of higher rates in the months to come, we are easily mesmerized by higher rates on the shorter end of the curve. However, we believe the shape of the yield curve is creating a trap to get you to stay short with your investments. While we don’t know exactly when this ride is going to start its journey lower, we do believe that based on market technicals, we appear to be nearing the top.
For those of you who have made the tough decision to participate in the market by dollar cost averaging, your portfolio yields and performance have been providing some reward. For those of you who have been reluctant, now is an opportunity to consider options for the future of your investments while adding positive spread to your portfolio. If you have questions or just want to discuss the markets and options for your bank, please reach out.
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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