Interest Rate Update – March

The 10-year benchmark US Treasury (US10Y) closed today at 2.53%. Rates went down to 2.55% in early January before rising back up to a 2.60%-2.70% range for most of January, February, and March. The adjustment came on the heels of Federal Reserve announcing that they will be ending their program which reduces the bonds it holds on its balance sheet. The Fed also stated that they will likely keep interest rates the same for the remainder of 2019.

Strength in tech stocks and strong economic data drove investors away from U.S. government paper, allowing the yield to rise by the end of the day (3/21/2019). A slow start to economic growth in 2019 has economists and the Fed concerned and in defensive mode. The upside is we are still growing, and the economy is expected to see its record set for the longest expansion by sometime mid-year. Experts are also expecting a drop in cost to borrow now that the Fed has shifted their stance on the economy in 2019.