Alright, if the title did not scare you off… hope not, we wanted to review the current state of interest rates, with some helpful (in our humble opinion IMHO) comments !
Here we go!
Deep Dive on Interest Rates
First up the US 1 Year Treasury
Think of this as your checking account interest with a little extra earnings … hence the one year time frame.
Seems long ago with all the worlds events, but not too long ago we were in the mid 2% range, currently at .12% ….
Many say we will be in this lower range for a long time, short sighted in our minds, but time will tell!
Next up the US 10 Year Treasury
Think of this as our proxy for mortgage rates, long term inflation and general economic growth expectations.
Not so long ago, in the mid 2% zone looking like we were headed to 3% … today .64%.
Many of the same folks saying we will be here for a long time. We will see!
10 Year Treasury Versus 90 Day Treasury – The Recession Predictor
Not sure if it was luck or just prophetic markets, but when this chart drops below zero (AKA Yield curve inverts) frequently a slowdown comes !
Inversion much of 2019 and then again during the early stages of the lock down.
Take special note of the spike in late March… recall that was when investors tossed their “safe” fixed income investments out the door because they had not other assets they wanted to sell … after the initial spike, normalcy returned.
US versus UK One Year Rates
Thought this was very interesting ….
This most recent interest rate cycle was shallow compared to historical norms, notice how the UK rates were even more shallow.
Many other countries could be inserted here as well with the same result
There you have it, a deep dive on domestic interest rates, yield curves and international comparisons….
Last Friday a new “Block Editor” was forced upon us … think of it as a makeover for all publishing/editing tools on our blog – initially HATED it….but upon further review we are getting used to it and hope you like some of the new fancy features – Like the Big A to start the post!
Have a Great “Deep Dive Interest Rates” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
Interesting Interest Rates Chart a Historical View and a Super Short Term View with Noted Movement
We spotted this neat chart last week from our friends once again at Visual Capitalist … here
Worth noting … we were close to these levels in 1945 as can be seen on the chart…
While the above is a more descriptive 200 year chart, we just could not help ourselves in showing a much shorter but encouraging one month chart of the same ten year treasury noted above …. again, VERY short time frame, but we like the upward movement….
We crow a lot about interest rates, but they really are VERY important…
Have a Great “Interest Rate Movement” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in Debt - Debt Management, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments
Tagged 10 Year Treasury, Interest Rates, Visual Capitalist