Wednesday, September 13, 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 |
| 09/06/23 | 5.37 | 5.47 | 5.54 | 5.43 | 5.02 | 4.73 | 4.42 | 4.37 | 4.28 | 4.55 | 4.35 |
| 09/07/23 | 5.37 | 5.45 | 5.52 | 5.40 | 4.95 | 4.67 | 4.38 | 4.33 | 4.25 | 4.53 | 4.34 |
| 09/08/23 | 5.38 | 5.46 | 5.53 | 5.40 | 4.99 | 4.70 | 4.40 | 4.36 | 4.27 | 4.53 | 4.34 |
| 09/11/23 | 5.39 | 5.45 | 5.52 | 5.40 | 4.99 | 4.71 | 4.41 | 4.38 | 4.29 | 4.57 | 4.37 |
| 09/12/23 | 5.39 | 5.45 | 5.53 | 5.42 | 5.02 | 4.70 | 4.43 | 4.38 | 4.28 | 4.54 | 4.35 |
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 09/12/2023
See-ya Tina, Welcome Home Tara
For much of the past two decades, fractionally low interest rates have pushed yield-hungry portfolios out on the risk spectrum. It all began when liquid & lonely investors were met by an alignment of weirdos in a speed dating event with alternative investment assets such as equities, currencies and crypto which resembled the original Star Wars bar scene. In short order, income-starved savers found themselves in an arranged courtship with their financial advisor’s daughter “Tina” (There Is No Alternative). They first met in 2010 when the Fed initiated ZIRP (Zero Interest Rate Policy) and it’s been a mostly loveless marriage since then.
But with recent Fed policy firmly focused on tamping down inflation, yields at multi year highs and top quality bonds are back and searching the scene for new buyers who will appreciate a long term profile of ample and steady returns. And deprived investors saddled with the burden of low income are eagerly swiping right at the sight of “Tara” (There Are Reasonable Alternatives).
A comparative look at performance makes Tara’s case clear. Recent muni bond offerings of good quality issuers and varied maturities have cleared the market at a tax free yield of 4.125%. This produces a Taxable Equivalent Yield of 7.00%+ (at the current 37% highest tax bracket +3.8% surtax on investment income) which compares favorably vs this table of 50yr Average Returns of the S&P 500 as reported by www.tradethatswing.com:
But with recent Fed policy firmly focused on tamping down inflation, yields at multi year highs and top quality bonds are back and searching the scene for new buyers who will appreciate a long term profile of ample and steady returns. And deprived investors saddled with the burden of low income are eagerly swiping right at the sight of “Tara” (There Are Reasonable Alternatives).
A comparative look at performance makes Tara’s case clear. Recent muni bond offerings of good quality issuers and varied maturities have cleared the market at a tax free yield of 4.125%. This produces a Taxable Equivalent Yield of 7.00%+ (at the current 37% highest tax bracket +3.8% surtax on investment income) which compares favorably vs this table of 50yr Average Returns of the S&P 500 as reported by www.tradethatswing.com:
Investors should expect equities to out-perform lower risk fixed income. But at current levels, bonds seem unusually attractive vs. higher risk (but not terribly higher yield) alternatives. That’s a wonderful combination. Bonds are back!
Let’s face it Tina, we never really even knew each other. Welcome home Tara
Let’s face it Tina, we never really even knew each other. Welcome home Tara
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