Bond Market Commentary

Updates on bond market data, news, and activity each day.

March 21, 2019

Wednesday's Action

Treasuries strengthened along the curve Wednesday as investors assessed the latest central bank updates. The yield on the benchmark 10-year note tumbled seven basis points to 2.53%, a 14-month low, after the Federal Reserve announced there will be no rate hikes in 2019. In a post meeting press conference, Fed Chairman Jerome Powell stated that a slowdown in China and the eurozone will provide a stiff headwind to U.S. economy, which remains on solid footing. Chairman Powell also stated policy makers only forecast one rate hike through 2021. The Fed also announced plans to reduce its balance sheet run-off from up to $30 billion to $15 billion in May, and plans to end the reduction in September. The short end of the yield curve inverted as the two-year note slipped seven basis points to 2.40% while the five-year yield retreated nine basis points to 2.33%. On the long end of the curve, the yield on the 30-year bond eased five basis points to 2.97%.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $2.3 billion during the week of March 18, compared to $4.9 billion the previous week and the 2019 weekly average of $4.8 billion. The Bloomberg 30-day visible supply rose $470 million to $10.221 billion on Wednesday above the 12-month average of $9.125 billion.

This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors.

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