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Wednesday, February 19, 2020
 
MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty
Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer
 Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell
 
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
02/11/20 1.57 1.57 1.55 1.48 1.41 1.39 1.40 1.50 1.59 1.89 2.05
02/12/20 1.57 1.58 1.56 1.49 1.44 1.42 1.45 1.55 1.62 1.93 2.09
02/13/20 1.59 1.59 1.56 1.48 1.44 1.42 1.43 1.53 1.61 1.91 2.07
02/14/20 1.60 1.58 1.56 1.49 1.42 1.40 1.42 1.51 1.59 1.89 2.04
02/18/20 1.61 1.58 1.56 1.47 1.41 1.37 1.39 1.48 1.55 1.85 2.00
                                                                                                                                                  Source: U.S. Department of the Treasury, as of 02/18/2020

Bloomberg Monthly Economic Survey

According to the latest Bloomberg survey of 71 economists conducted from February 7th through February 12th,
the U. S. economy will expand at 1.8% in 2020, 2.0% in 2021 and 1.9% 2022. This is the first survey conducted since the FED left the overnight rate unchanged in a range of 1.5% - 1.75% at its January 29th meeting.

Bullet points of note:
  • The chance of a recession happening over the next 12 months is 26.5%
  • First quarter 2020 GDP is forecast at 1.5%, versus the prior survey at 1.6%
  • Second quarter 2020 GDP is forecast at 1.9%, versus the prior survey at 2.00%
  • 2020 CPI is forecast at 2.00%, versus the prior survey at 2.1%
  • 2021 CPI is forecast at 2.1%, versus the prior survey at 2.0%
Although the survey forecasts no move in the Fed funds rate through the second quarter of 2022, the Fed funds futures market is betting on an 84.5% chance of at least one quarter point drop in rates by the December meeting this year.
 
1Q 2Q 3Q 4Q     AVG     AVG    AVG
2020 2020 2020 2020 2020 2021 2022
GDP Annualized 1.50% 1.90% 2.00% 2.00% 1.80% 2.00% 1.90%
 Previous survey 1.60% 2.00% 1.90% 1.90% 1.80% 1.90% na
Consumer spending 2.10% 2.10% 2.10% 2.10% 2.40% 2.10% 2.00%
   Previous survey 2.00% 2.20% 2.00% 2.00% 2.40% 2.00% na
Core PCE Prices YOY% 1.80% 1.80% 1.80% 1.90% 1.80% 1.90% 2.00%
   Previous survey 1.90% 1.90% 1.80% 1.90% 1.90% 1.90% na
Unemployment rate 3.50% 3.50% 3.50% 3.60% 3.50% 3.60% 3.80%
   Previous survey 3.60% 3.60% 3.60% 3.60% 3.60% 3.70% na
1Q 2Q 3Q 4Q 1Q 2Q 3Q
2020 2020 2020 2020 2021 2021 2021
Fed funds,lower bound 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
   Previous survey 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
Fed funds,higher bound 1.75% 1.75% 1.75% 1.75% 1.75% 1.75% 1.75%
   Previous survey 1.75% 1.75% 1.75% 1.75% 1.75% 1.75% 1.75%
Three-month libor 1.80% 1.80% 1.80% 1.81% 1.81% 1.84% 1.84%
   Previous survey 1.88% 1.80% 1.82% 1.75% 1.83% 1.81% 1.85%
Two-year note 1.53% 1.60% 1.64% 1.68% 1.72% 1.75% 1.70%
   Previous survey 1.61% 1.67% 1.64% 1.66% 1.70% 1.70% 1.70%
Ten-year note 1.74% 1.80% 1.86% 1.95% 2.00% 2.02% 2.03%
   Previous survey 1.87% 1.90% 1.92% 2.00% 2.00% 2.00% 2.05%
Source: Bloomberg L.P.


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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