MFA Musings: 6/10/19
We are inverted.
To quote Charley this past Saturday, “The election process has started again? Seriously?”
It has started again. Nineteen of the twenty (yes 20) Democratic presidential hopefuls visited Iowa this weekend to raise money. I will now be turning off the TV for the next year.
US Treasury yields:
US Treasury yields are very low, again. Mortgage rates are back under 4.00%. Yields:
3-Month Treasury = 2.27%
2-Year Treasury = 1.88%
3-Year Treasury = 1.85%
5-Year Treasury = 1.89%
10-Year Treasury = 2.13%
We are inverted from the 3-month to the 3-year Treasury. Inversions are a solid indicator of a pending recession. Although the chances are much higher when the entire curve is inverted, so, this inversion may be indicating more of a slow down than a recession.
The Federal Open Market Committee (FOMC) has the exciting job of setting short term interest rates, among other actions. The Federal Funds Rate futures point to a potential of up to three 0.25% rate cuts this year. We feel that this is a little aggressive, but none-the-less this is a major shift from last month. The futures market is volatile.
Contact your MFA advisor to discuss ways to grow profitability in this low rate environment. Also, please let us know if you would like to get in on the presidential candidate squares. All of us at McQueen Financial are dedicated to your long-term success.
Have a great week!