Bryant Bank Market Update - April 19, 2022

Good morning, treasuries are selling off on talk of a 75bp rate hike and the IMF’s lowered global growth forecasts.?The 10yr UST yield is up to 2.90%, while the 5yr is trading at 2.85%, the 2yr at 2.53% and the 1yr at 1.80%.

Amid growing recession chatter, St. Louis Fed President James Bullard signaled some level of optimism, saying “Not all hope is lost here.?I think we’re in a position where we can maintain credibility and get inflation lower.”?Mr. Bullard—an outspokenly hawkish FOMC member—furthermore said that while a 75bp rate hike is not his base case, he wouldn’t rule it out.?

His statements sent bond prices lower as they bolstered expectations for higher interest rates.?And while it caught few by surprise that the IMF sharply cut its forecasts due to the invasion of Ukraine, it did counter some of the selling pressure for longer term bonds by stiffening safe-haven demand.?The net effect has been a slightly higher, slightly flatter yield curve.

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Quote of the Day

“Tact is the ability to describe others as they see themselves.”?--Abraham Lincoln