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Interest Rates Range-bound

Stronger economic data, budget deficits and inflation concerns pushed rates higher in February with the ten-year t-note yield rising to 3.77%, the highest level since April 2010. However, QE2, slightly softer economic data and a safety bid following negative global developments worked to push rates to their low point for the year in mid-March with ten-year yields falling to 3.15%. By quarter end the rate rebounded right back to the middle of the range at 3.47%. Looking into the next few months, we expect rates to remain range bound but with a modest steeping of the curve as we approach mid-year and the end of the Fed’s QE2