May CMO: What to Make of the Movement in Interest Rates


May 03, 2018

In April, the 10-year Treasury yield moved above 3%, the first time since January 2014. At the same time, the interest rate curve continued to flatten and now sits approximately 50bps from inversion. Some investors worry that one, or worse, both are ominous signs for the economy and return-seeking assets. While the movement of interest rates is a critical signal of future economic strength, we believe drawing overarching conclusions, at this time, is premature.