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The Effect on the Yield Curve <br />5 <br />4.5 <br />4 <br />3.5 <br />3 <br />I_- <br />2 <br />1.5 <br />1 <br />o/n <br />3 mo 6 mo 2 yr 5 yr 10 yr 30 yr <br />---M--Oct-07 <br />--*- Dec-07 <br />Mar-08 <br />-May-08 <br />¦ -Jun-08 <br />Although the volatility has been extreme in the stock markets and the dollar has reached new historic <br />lows. the curve appears to have been stable. <br />Stability has not been the story however with rates jumping up during the month. The entire curve <br />moved up with a jump in the two-year area to 3% and the five year to 3.75% - but a worsening <br />economic picture returned the curve to its May 1St levels. <br />11 .2 The curve through the credit markets continues to show a need for higher rates. Backups like the <br />j one seen this month are opportunities to buy in the shorter maturities to capture yields well above the <br />j pool and money fund levels.