Historical Levels of Inflation and Treasury Rates

Tuesday’s announcement that the current annualized rate of inflation increased to 8.5% (the highest since December 1981) briefly tempered the rate of the benchmark US Treasury before today’s rise. Increases in the indexes for gasoline and food were large contributors to the seasonally adjusted number. The 10-year treasury peaked at a 3-year high of 2.79% on Monday then dropped as low as 2.69% in the two days following the CPI announcement only to rise again to 2.82% (the highest point since late 2018).

The market is still quite liquid for all lending segments including CMBS, insurance companies, banks, credit unions, agencies, and debt funds. Although both inflation and the 10-year Treasury rate are in a cloud of uncertainty, current interest rates remain low from a historical perspective.