We are approaching the time to consider a permanent change in the U.S. economy.

Tariffs, tariffs, and more tariffs. That is the only driver of financial asset pricing. Economic fundamentals do not matter. Market interest rates dropped to levels not seen since early 2018 when the Fed was normalizing monetary policy. The yield on the two-year treasury has dropped from 2.6% to 1.88% since March. The yield on the ten-year treasury has declined from 3.25% at its peak late in 2018 to 2.19%. The yield on the three-month treasury has only dropped by 5 basis points moving from 2.40% to 2.35%.

 

PROBANK AUSTIN ADVISOR - JUNE 3, 2019