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Interest Rates are Helping Stock Values, But...

May 06, 2024

Interest rates as represented by the 10yr U.S. Treasury have decreased in 5 of the last 6 market days (through Friday 5/3) and that trend continues today, so far, with the 10yr below 4.5% for the first time since April 9th.  The deteriorating GDP and other negative reads on the economy, like Friday’s “Jobs Report” are providing a glimmer of hope that the Fed will be able to justify a decrease in their rate target sooner rather than later.  I continue to believe that the credit quality of the debt being auctioned by our U.S. Treasury fueled by increasing deficits implicating more risk associated with our debt, will eventually weigh heavier on where rates land.  

I guess my last paragraph is a long-winded way of saying I’m not convinced that the current trend can last.