Credit Market Report

Influencing Factors:

  • After consumer inflation data came in stronger than expected Wednesday, the 10-year yield hit a four-year high. But traders said the selloff extended too far, leaving hedge funds to unwind their short bets on government paper. The short trades were bets bond prices would fall and served as a way to insulate investors from rising rates.
  • Inflation remains the main focus for bond investors after the consumer-price index in January rose 0.5%, above the 0.4% forecast by economists polled by MarketWatch. The core gauge, which strips out volatile food and energy prices, rose 0.3%, higher than the 0.2% expected.
  • Rising inflation over the past several months has spooked bond investors, which have enjoyed a period of ultralow rates supported by the Federal Reserve. However, signs of rising prices risk ending a prolonged bull market in the bond market because the U.S. central bank may feel compelled to lift interest rates at a faster clip—four rate increases rather than three expected—amid reemergent inflation.

Fixed Rate Indices

MaturityDateCouponYieldChange
2-year...20-Jan1.25%2.18%  ( + )
5-year...23-Jan1.75%2.64%  ( - )
7-year25-Jan2%2.82%  ( - )
10-year28-Feb2.38%2.89%  ( - )
30-yearFeb-483%3.14%  ( - )
Treasury Rates are as of 02-15-18 as reported by The Wall Street Journal.

Prime Rate

Prime...4.50%
Last effective change12/14/17

Floating Rate Indices

MaturityRate
30-day LIBOR.....1.59%
90-day LIBOR.....1.87%
6-month LIBOR...2.10%
1-year LIBOR......2.38%

London Interbank Offered Rates are as of 02-15-18 as reported by The Wall Street Journal.

Spread Markets

MaturitySpreadsRate
2-year SWAP....26.00 bps2.44%
5-year SWAP....8.50 bps2.72%
7-year SWAP....-1.10 bps2.8100%
10-year SWAP...0.90 bps2.90%

SWAP Rates are as of 02-15-18 as reported by the Wall Street Journal.