| Wednesday, April 26, 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 |
| 04/19/23 | 3.71 | 5.12 | 5.12 | 4.81 | 4.25 | 3.95 | 3.70 | 3.65 | 3.59 | 3.91 | 3.79 |
| 04/20/23 | 3.31 | 5.08 | 5.08 | 4.73 | 4.14 | 3.86 | 3.63 | 3.58 | 3.54 | 3.87 | 3.74 |
| 04/21/23 | 3.33 | 5.07 | 5.04 | 4.76 | 4.18 | 3.89 | 3.66 | 3.62 | 3.57 | 3.91 | 3.78 |
| 04/24/23 | 3.45 | 5.00 | 5.02 | 4.72 | 4.09 | 3.79 | 3.57 | 3.53 | 3.49 | 3.84 | 3.71 |
| 04/25/23 | 3.98 | 5.04 | 4.96 | 4.64 | 3.96 | 3.65 | 3.45 | 3.43 | 3.40 | 3.77 | 3.66 |
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 04/25/2023
Timing the Market
The fall of Silicon Valley Bank (SVB) and Signature Bank last month put pressure on financial institutions worldwide. For most banks, it has essentially been a PR situation – reassuring depositors and customers their deposits are safe. For some, it can be more than that and there are truly balance sheet problems to solve. We believe most problems can be solved and this industry, especially community banks, will prevail and continue to thrive.Because of these few closures, liquidity continues to be the focus. Most bank bond portfolios grew in 2020-2022 when bond prices reached all-time highs. The FED followed this by setting records in how aggressively they raised rates. Unrealized losses are manageable as long as deposit outflow remains low. The uncertainty of deposits has community banks spending time identifying liquidity options in the investment portfolio.
Trying to time the market is something we often suggest NOT doing because we can’t predict the future, therefore we stand by the practice of dollar cost averaging. We should always have a conviction on the long term outlook of rates, but putting too many dollars on the line for a short term move can be risky.
The FDIC’s intervention of these banks meant they also took responsibility of their bond portfolios. Just as they sold off their loans and remaining deposits, they too will sell each and every bond. This sale starts in the next couple of weeks. Even though it will be done in groups over many days, the portfolio is over $100 Billion and this event will flood the market and can have an impact on pricing / spreads in non-treasury sectors.
For this reason alone, if you have been considering raising funds using your own balance sheet, it could be beneficial to start with at least a portion ahead of the SVB sale. We can help identify the best candidates in your portfolio and provide indications or bids. Call us. We are always here to help.
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