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Wednesday, August 27, 2025
 

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Chris Thompson • Sean Doherty • Mark Tranckino • Brian Schaff
Natalie Regan • Aaron Stoffer • David Farris • Jeff Macy 
Josh Kiefer • Todd Czinege • Trey Valentine • Cody Kreutziger

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
08/18/25 4.35 4.23 4.09 3.93 3.77 3.72 3.85 4.07 4.33 4.91 4.94
08/19/25 4.34 4.20 4.05 3.91 3.75 3.71 3.83 4.04 4.31 4.89 4.91
08/20/25 4.34 4.22 4.07 3.91 3.75 3.70 3.81 4.02 4.29 4.88 4.90
08/21/25 4.34 4.24 4.10 3.96 3.79 3.75 3.86 4.07 4.33 4.90 4.92
08/22/25 4.32 4.19 4.04 3.88 3.70 3.65 3.76 3.98 4.26 4.84 4.88
08/25/25 4.34 4.20 4.04 3.89 3.73 3.67 3.79 4.00 4.28 4.86 4.89
08/26/25 4.30 4.18 4.02 3.86 3.68 3.62 3.74 3.97 4.26 4.88 4.92

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 08/26/2025.
                                                                                                                                                                                      


Deep Discount Agency ARMs
 

We believe deep discount agency ARMs offer good value in today’s market.  With yields close to 4.50%, spreads to treasuries north of 70 bps, ~4-year duration and a positively convex risk profile, we think this structure is worth considering.

Take a look at FHLMC Pool 841640 shown below in Exhibit 1.  The yield table indicates a base yield of 4.46% with 72 bps of spread, a 4.23 year duration at a price of 91-19+.  The yield profile is also stable across all interest rate scenarios.

This bond also exhibits positive convexity.  It gains more as rate go down that it loses as rates go up in the +/-100 and +/-200 scenarios.  This can be seen in Exhibit 2.  Test #3 in this exhibit illustrates the bond gains 4.1% down 100 and 8.3% down 200 while losing 3.9% and 8.2% up 100 and 200 respectively.  This is positive convexity and is a risk profile similar to a 4-year treasury note.
 
We are of the opinion that this bond also stacks up well from a risk vs return standpoint to other fixed rate alternatives in the market as well, as shown in Exhibit 3 below.

For more information, please contact your Country Club Bank Capital Markets Group representative.


 



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