Liberty SBF Interest Rate Commentary – Investors Fixing on Treasuries

December 11, 2013

Investors Fixing In On Treasuries

Bloomberg.com reported that the 10-year treasury note rose for the third day as some investors saw value in the bond, balancing the yield’s three-month high against the prospect of the Federal Reserve putting the brakes on QE and better than expected news on the jobs front.

“With all the talk of the Fed tapering in December, investors see that as being priced in to the 10-year already,” said Alex Cohen, CEO of Liberty SBF.

The 10-year yield resistance has risen from 2.78% in November to 2.81% with lots of volume between 2.83%-2.84%.

Confidence in Economy Increasing

Market confidence is high and with the recent economic news one only has to look at the outlook released by experts who gathered at 27th annual Economic Outlook Symposium on Dec. 6 in Chicago for validation.

“…the nation’s economic growth in 2014 is expected to increase at a pace above its historical average,” the Chicago Federal Reserve said in a statement about the meeting.

Lacker Would Vote Taper, If He Could 

Jeffrey Lacker, president of the Richmond Federal Reserve Bank, confirmed that the Feds will discuss pulling back its buying program when it meets, Market Watch reported but he did not say how the discussion will go “but made clear that he is not a supporter of the program.”

In a recent speech, Lacker said he would vote no on more stimulus. That is if he had a vote. Lacker doesn’t get to cast a ballot but is quoted as saying that the “key issue..is the extent to which the benefits of further monetary stimulus are likely to outweigh the costs.”

Lacker will be a voting member of the Fed’s policy-making panel in 2015.

To see our CMBS rates for the week of December 11, 2013, please click here.