Wow, what a difference a year makes. Last year at this time, there was a fear that the economy was overheating and in need of continued interest rate hikes from the Federal Reserve. The 10-year U.S. Treasury note had just hit 3.25% and the service sector strength as measured by the ISM (Institute for Supply Management) measured its highest read in history.
Fast forward one year, and here we sit with the 10-year note sitting at 1.54% and growing fears of a recession. With a yield curve inversion, a trade war with China and other countries, and overall investor exhaustion from the daily deluge of news that moves markets some days and falls on deaf ears on others, it’s pretty remarkable that the market has maintained these levels.