Economic and Fixed Income Insights, May 15, 2019

On May 13, China announced retaliatory measures following the Trump administration’s decision last week to increase tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent. The Dow Jones Industrial Average dropped 617 points, or 2.4 percentage and posted its worst session since January 3. Gold prices settled near one-month highs on May 14 as an escalation in the US-China trade dispute sent investors looking for safe haven assets. The metal closed at $1,303/oz, its highest level since April. Bond yields sank after a fresh round of Chinese tariffs sent investors into haven assets.  For the week, the 10-year UST finished 5 basis points lower and the 30-year UST finished 2 basis points lower. Municipal yields saw similar declines. The 10-year MMD fell 5 basis points to 1.73 percentage, and the 30-year MMD fell 6 basis points to 2.39 percentage.

Interest Rate Observations

Source: Thomson Reuters, Bloomberg. The table above reflects market conditions as of May 14, 2019.

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