April 17, 2019
Rates up to one year continue to be stable (they’re all virtually the same) with longer term rates seeing some softness. The Federal Reserve is in full “wait and see” mode with the economy worldwide seeming to slow somewhat and any sign of inflation pressure nowhere to be found, even though wages have started to strengthen. The ten year hit 3.24% about mid-November, then sank to 2.39% by about the end of March before seeing a slight upturn over the past two weeks to 2.55% as of yesterday’s close. The open question is whether the Fed will see a reason to raise rates in 2019 (probably not) OR if the economy slows, actually cut rates a bit. Short term rates, one month to one year, have been mostly unchanged for the past 60 days with the 30 day money moving between 2.40-2.51%. The yield curve inverted for a few days in late March with the spread between three month T-bills and 10 year Bonds at a negative 5 basis points. It is now very slightly sloped at 9 basis points. It began 2019 at 24 bps (at the beginning of 2010 it was 377 bps). The dollar continues to be stable with most major currencies.
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