Tamer Inflation, Washington Musical Chairs, Tarriff Uncertainty Rally Treasuries, Lower Yields

Remember that last month’s wild volatility all started with the January employment report release indicating the highest wage inflation since the Great Recession. Last week’s “Goldilocks” February report was greeted with elation in stock and bond markets. Higher than expected job gains AND lower wage inflation, a perfect mix. Long treasury yields also dropped on “flight to quality” as the potential effects of tariffs are still unknown (the latest fear is reprisals by China, stifling worldwide growth), Secretary of State dismissal. With the 2-year Treasury yield spiking, the yield curve is flattening. This can be a sign of a slowing economy. Stay tuned.By David R. Pascale, Jr. , Senior Vice President at George Smith Partners