Flight to Quality and “Symmetric Inflation” Rhetoric Rallies Treauries, 10 year Yield Below 3.00%

Treasuries got some “safe haven’ buying today as rhetoric heated up on the US-China front (trade talk tensions) and US-North Korea (the highly anticipated summit is still in flux). Investors also saw the release of “dovish” May meeting minutes from the Federal Reserve. After years of highly accommodative policy designed to spur growth, it seems the Fed is in no hurry to use tools to dampen growth (note that the Fed has not been in that role since June of 2006 when they raised rates to cool the housing market). The notes contained more detail on the “symmetric inflation objective”, it seems that the Fed will allow inflation to “hang out” at about 2.00% or above for a while (how long? We don’t know) without raising rates. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners