Capital Markets: Observations & Insights
Tightening Underway Party Without the Punch?
• As the Federal Reserve normalizes policy… • …It is driving short-term interest rates higher
• This is largely a worldwide phenomenon…
• ...Because of the interconnectedness of the global economies
U.S. 2-Year Treasury Yield
G7 + China 2-Year Government Yield Year-over-Year Change
2.5%
120
2.0%
80
40
1.5%
0
1.0%
-40
Basis Points
0.5%
-80
-120
0.0%
Italy
U.S.
U.K.
China
Japan
Jul-16
Jul-17
France
Jan-17
Jan-18
Mar-16
Mar-17
Mar-18
Nov-16
Nov-17
Sep-16
Sep-17
May-16
May-17
Canada
Germany
Source: FactSet as of 3/29/18.
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