Fixed Income Recap

Treasuries
Treasuries sold off this morning but recovered throughout the day to end about flat. The two-year finished the day down 1/64, and the ten-year was higher by 1/4. The benchmark curve was 2.5 basis points flatter on the day, and currently sits at +191 basis points. A basis point represents .01%.

There were no Treasury purchases today but the Fed will purchase TIPS tomorrow while also announcing what it bought in MBS for the week.

Mortgage Rates
The Mortgage Bankers Association reported a decline in the average 30-year fixed mortgage rate for last week to 4.70% from 4.73% the week prior. This is the lowest number reported by the survey since it began in 1971 and most likely has further to fall as mortgage brokers struggle to meet demand.

CPI Falls - TIPS Rally
Treasury Inflation Protected Securities had a good day despite a drop in CPI for the month on March that was reported today (The headline number was -.1% month-over-month, -.4% year-over-year). The on-the-run ten-year Treasury-linked note was up .47% today while the TIPS ETF (TIP) was up a measly .06%.

Have a great evening.

Cliff J. Reynolds Jr., Junior Analyst