Wednesday, August 14, 2024 |
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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 |
| 08/07/24 | 5.34 | 5.22 | 4.95 | 4.43 | 3.96 | 3.80 | 3.76 | 3.83 | 3.94 | 4.33 | 4.25 |
| 08/08/24 | 5.34 | 5.22 | 4.98 | 4.47 | 4.04 | 3.88 | 3.83 | 3.88 | 3.99 | 4.37 | 4.28 |
| 08/09/24 | 5.35 | 5.22 | 4.98 | 4.49 | 4.06 | 3.88 | 3.80 | 3.84 | 3.94 | 4.31 | 4.22 |
| 08/12/24 | 5.36 | 5.21 | 4.98 | 4.48 | 4.02 | 3.83 | 3.75 | 3.79 | 3.91 | 4.29 | 4.20 |
| 08/13/24 | 5.32 | 5.18 | 4.93 | 4.40 | 3.93 | 3.75 | 3.67 | 3.73 | 3.84 | 4.24 | 4.16 |
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 08/13/2024.
Caution: Trap Ahead
The banker’s trap is unfortunate, but true. This means that banks are typically strapped for cash when they could most benefit - rates up - and are awash in excess funds when rates are low… hence, the banker’s trap. We appear at a point in the cycle where we are expecting some action from the Fed. There are significant economic pressures and it’s an election year so we have to be prepared for anything with so much uncertainty. History tells us that there could be a trap ahead and now might be the time to enact a plan to avoid it.
The charts below show aggregate data of the entire banking industry. The red box identifies the time when banks began adding to their bond portfolios because loan demand was still low and deposits were elevated – also, rates were at all-time lows. For many community banks that invested excess deposits into short term bonds, those purchases are starting to come due and will continue over the next few years – and like the textbook shows, just in time for rates to come down from 15 year highs.
Good news though, rates are still significantly higher than bank bond portfolio averages, so here are a few ideas to avoid falling into the trap again:
- BUY BONDS
- BUY BONDS
- BUY BONDS
In all seriousness, this isn’t a one size fits all situation as a lot of investors have been out of the market for a minute, so call us and we can find the best options for you. But participating in the market, even in small amounts, may steer you from having some non-buyer’s remorse in the future.
All U.S. Banks
Source: BankRegData.com
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