Update from David on the 10 Year Note market and the state of Interest Rates

I haven’t posted an update on the interest rate market in a while. The last 10 year note update I provided was at the end of 2017, when the 10 year note yield was at 2.4 percent. The market has now reached new heights as the 10 year yield is now at 3 percent. Below are some of my observations on the 10 Year Treasury Note.

The U.S. Treasury’s 10 Year Note broke slightly above 3 percent yesterday, marking a significant moment in the marketplace. The 10 Year Note has not traded with a yield above 3 percent since January 2014, over 4 years ago (that is a long time). Today, April 26th, 2018, the 10 Year Note dropped below 3 percent; however, it is uncertain if it will remain at or below 3 percent for long. With the Federal Reserve planning to continually shrink its balance sheet and raise interest rates, it will be interesting to see where the 10 Year Note heads during the second quarter of 2018. All indications are that rates will continue to rise throughout the year. The main questions about rising interest rates will be how much will they rise by over the next few months and over the course of 2018? The magnitude of the percentage rise in yields will be key to watch.

Monitoring the effects of rising interest rates on the various markets, including real estate, stocks, and especially bonds will be important over the next few months.