Source: US Dept. of Treasury End of Day
• The yield curve steepened over the week as the two-year Treasury note increased by one basis point to 0.16% while the five-year note increased by five basis points to 0.89%.
• The Fed remains committed to keeping rates floored for the next couple of years despite the recent run up of yields on the longer end of the maturity spectrum, however, they did significantly upgrade their near-term GDP growth outlook to 6.5% for 2021.
• With the third wave of stimulus being delivered alongside a reopening economy, market expectations are pricing in significant growth and perhaps a spike in inflation leading some to argue that the Fed will be forced to hike rates sometime before 2023.
