Interest rates are front and center today as the 10 year yield broke through a critical key technical level and is now up to 3.20%. The yield has risen 40 basis points in the last 45 days. The rate has not been above 3.12% since 2011. A perfect storm of factors is fanning the flames: (1) The new NAFTA agreement removes a major uncertainty for US growth, and markets seem to have accepted continued rocky US-China trade relations (for now); (2) The mid September expiration of a special tax benefit for pension funds purchasing Treasuries has had an effect on demand, buying from these major purchasers has slowed, and it seems like this anomaly held rates down in August and September as they loaded up before the deadline; (3) Continued good news on the US economic front, today it was the ISM non-manufacturing index hitting 61 vs a 58 estimate, a post recession high. We may be entering a “new” reality, or is it the return of the “old” normal of pre-recession metrics with treasury yields in the 4-5% range. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners