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Treasury Rates Update: June 22nd, 2023

For the past 2 weeks, 10 Year Treasury rates were up 1bp. Past week: up 8 bp. On 5.3.23 the Fed made an announcement that broadly hinted that future rate increases would be in a “wait and see" mode. CPI was down from 4.9% to 4.0% on 6.13..23 and 6.14.23 Fed did not increase rates, for the first time in 15 months.

 

The red line is the most current rate while the green line is one week ago.

The entire yield curve increased. 2-year term increased 15bp with the 10-year up 8bp . This made the inverted yield curve steeper. One-month rates were unchanged.

 

Volatility in the one-month Treasury market has diminished in the past few weeks. With the inverted yield curve, any firm borrowing short to fund longer-term assets is going to be stressed: mortgage banking firms and bond investment firms? Note the muted reaction on the One Month rates to the news regarding the improved CPI and Fed holding rates unchanged.





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