Market Commentary 3/24/17

Bond yields inched higher this week after a very strong rally after last week’s Fed meeting. The combination of increasing inflation data and strong employment levels yield the prospect of higher rates on the horizon. Lower interest rates remain a wild card, dependent on whether or not the Trump administration can push through their agenda through Congress.

The withdrawal of Trump’s health care reform bill from the Republican-controlled house late Friday sent stocks lower in late trading. As of this article, it seems unlikely that this bill will pass, which is a reminder of the difficulty Trump may have with the next big thing on his agenda, his controversial tax reform plan.

Bonds should benefit from this uncertainty while stocks may struggle to go higher in the face of this in-fighting. Only time will tell.

With the 10-year Treasury note at 2.410%, we are biased toward locking in interest rates at these levels, which remain quite attractive.