Wednesday, June 2, 2021 |
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MANAGING DIRECTOR: Scott Carrithers PORTFOLIO SALES AND SERVICE: George Morris • Chris Thompson • Sean Doherty • Kevin Doyle • Mark Tranckino Jeff Goble • Nicole Burczyk • Natalie Regan • Aaron Stoffer • David Farris • Lonnie Harris Brian Schaff • Josh Kiefer • Robert Schuyler • Tom Toburen • Aaron Hemphill |
| 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 |
| 05/25/21 | 0.01 | 0.02 | 0.04 | 0.04 | 0.15 | 0.30 | 0.79 | 1.23 | 1.56 | 2.16 | 2.26 |
| 05/26/21 | 0.00 | 0.02 | 0.04 | 0.04 | 0.14 | 0.31 | 0.80 | 1.24 | 1.58 | 2.17 | 2.27 |
| 05/27/21 | 0.00 | 0.02 | 0.04 | 0.04 | 0.14 | 0.31 | 0.81 | 1.28 | 1.61 | 2.20 | 2.29 |
| 05/28/21 | 0.01 | 0.01 | 0.03 | 0.05 | 0.14 | 0.30 | 0.79 | 1.24 | 1.58 | 2.18 | 2.26 |
| 06/01/21 | 0.01 | 0.02 | 0.04 | 0.04 | 0.16 | 0.31 | 0.81 | 1.28 | 1.62 | 2.22 | 2.30 |
Are Rates Ready to Climb?
As noted in a Bloomberg article today by Craig Torres, Fed Governor Dr. Lael Brainard sees risks on both sides of monetary policy right now. Inflation numbers in the short term are coming in higher than officials expect, but the thought is that these numbers will come back down as the inflationary increases are more related to shortages created by the pandemic. Unemployment remains elevated, as the shortfall in jobs is over eight million relative to their pre-pandemic levels.
What does this mean?
Well, if we were at full employment with these inflation numbers, we would expect that interest rates would be climbing higher. However, since many of the increases in prices are coming from shortages in products, the expectation is that as people get back to work, these shortages will be right-sized and prices will return to pre-pandemic levels, potentially.
While we may see some temporary movements in yields, this market seems to be providing us an opportunity to take a closer look at our portfolios and punt those investments that may give us some heartburn when rates do start climbing higher.
Please reach out to your CCB representative if you would like to additional information or want to discuss options that work for your bank.
What does this mean?
Well, if we were at full employment with these inflation numbers, we would expect that interest rates would be climbing higher. However, since many of the increases in prices are coming from shortages in products, the expectation is that as people get back to work, these shortages will be right-sized and prices will return to pre-pandemic levels, potentially.
While we may see some temporary movements in yields, this market seems to be providing us an opportunity to take a closer look at our portfolios and punt those investments that may give us some heartburn when rates do start climbing higher.
Please reach out to your CCB representative if you would like to additional information or want to discuss options that work for your bank.
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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