The fiscal stimulus of tax cuts are being undermined by the uncertainty of a trade war

Investors continue to focus on the negative impact of the developing trade war as opposed to the strong economic growth data being released. The yield on the ten-year treasury has backed down from 3% two weeks ago to close last week at 2.86%. The yield on the two-year dropped to 2.60%, decreasing the spread between short and long-term rates to less than 30 basis points after expanding to 35 basis points two weeks ago. The curve remains flat.

 

PROBANK AUSTIN ADVISOR - AUGUST 13, 2018