The march up of market interest rates intensified last week. The yield on the ten-year treasuryjumped above 3% and has held at these higher levels. There was no specific inflation data which drove this yield higher as one would normally expect. The entire term structure of market rates moved up 15 basis points during the week. It appears the bond market decided economic growth is accelerating and this will lead the Fed to move managed rates up more than previously assumed this year. The curve did not steepen with the five-year at nearly 2.9% and the two-year at nearly 2.6%. This large upward move in market interest rates in the short span of only three days has laid the foundation for further upward moves in market rates in the short run. We, along with most other forecasters, do expect the Fed to raise managed rates by another 25 basis points at their June FOMC meeting. Inflation is…

ProBank Austin Advisor – May 21, 2018