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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 |
| 08/24/22 | 2.29 | 2.82 | 3.28 | 3.35 | 3.36 | 3.40 | 3.20 | 3.20 | 3.11 | 3.55 | 3.32 |
| 08/25/22 | 2.42 | 2.88 | 3.25 | 3.33 | 3.35 | 3.37 | 3.15 | 3.11 | 3.03 | 3.47 | 3.25 |
| 08/26/22 | 2.39 | 2.89 | 3.26 | 3.36 | 3.37 | 3.40 | 3.20 | 3.14 | 3.04 | 3.44 | 3.21 |
| 08/29/22 | 2.45 | 2.97 | 3.32 | 3.43 | 3.42 | 3.45 | 3.27 | 3.21 | 3.12 | 3.50 | 3.25 |
| 08/30/22 | 2.43 | 2.97 | 3.31 | 3.48 | 3.46 | 3.47 | 3.27 | 3.22 | 3.11 | 3.49 | 3.23 |
Source: U.S. Department of the Treasury, as of 8/30/2022
Jackson Hole 2022 - What to do now
Last week, the Federal Reserve Bank of Kansas City held its 45th annual economic symposium. All eyes were on Fed Chairman, Jerome Powell, as he reported on the hot topic of inflation. It was exactly one year ago when Chairman Powell stated that inflation was likely to be short-lived and return to the long-run FED objective of 2.00%. Inflation now sits much higher one year later, 8.5% vs 5.4%, and higher consumer prices are at great risk of becoming entrenched into the economy. Powell’s resolve to fight inflation has been strongly questioned over the past couple months and markets have even begun to price in potential rate cuts by the Fed starting next year (2023).
At last week’s Jackson Hole conference, Powell left no room for question that he is serious about fighting off inflation with further rate hikes. His opening remarks of the conference, which lasted only 8 minutes, contained the word “inflation” 45 times. The statements were clear and unmistakably hawkish leaving the markets a little caught off guard. Following further comments by other Fed governors at the conference, it seems that most are looking forward to raising the Fed Funds rate closer to a 4.00% target over the next several meetings.
What do we do now? Treasury yields continue to remain elevated as seen in our Regression Analysis (highlighted in last week’s PMR). We continue to recommend high-quality MBS and Municipal securities that have strong cash flow characteristics. A strategy like this will provide reinvestment dollars if and when rates continue to rise with the Fed’s stated strategies.
To discuss your current portfolio and identify options that work best for you bank, please give your Country Club Bank representative a call.
At last week’s Jackson Hole conference, Powell left no room for question that he is serious about fighting off inflation with further rate hikes. His opening remarks of the conference, which lasted only 8 minutes, contained the word “inflation” 45 times. The statements were clear and unmistakably hawkish leaving the markets a little caught off guard. Following further comments by other Fed governors at the conference, it seems that most are looking forward to raising the Fed Funds rate closer to a 4.00% target over the next several meetings.
What do we do now? Treasury yields continue to remain elevated as seen in our Regression Analysis (highlighted in last week’s PMR). We continue to recommend high-quality MBS and Municipal securities that have strong cash flow characteristics. A strategy like this will provide reinvestment dollars if and when rates continue to rise with the Fed’s stated strategies.
To discuss your current portfolio and identify options that work best for you bank, please give your Country Club Bank representative a call.
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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