August 18, 2021
Rates at the medium and long end of the curve have moved down over the past six weeks while shorter term rates have held steady at basically zero. The 10-year Treasury Note has come down about 25bps since July 1 from 1.48% to 1.24%. It was 1.62% at the beginning of June. Rates are under 1.00% out to seven years with one month to one year rates at .04-.06%! The yield curve continues to flatten with the spread between three month T-bills and 10 year bonds now at 118bps (down from 143 on July 1). The Fed seems to be getting slightly more hawkish and most now think rates may start moving higher in 2022 with initial action being a tapering of asset purchases. However, inflation and the possible slowdown effects of the Delta variant make things hard to predict.
The dollar has been moving sideways against most world currencies.