The 10 year Treasury closed out August today at 1.57%. Due to the extremely low treasury in late July, the 11 basis point increase in August turns out to be the largest monthly gain since last June. After Fed Chair Yellen (and other Fed officials) indicated that a rate increase is “appropriate”, the possibility of a September rate bump hangs over the market. As the Fed has pretty much blown off international “headwinds” (Brexit, etc) in their focus, US economic reports loom large. Friday’s August jobs report will be one of the final major factors in the run up to the September 20th Fed meeting. Today’s comments by Boston Fed President Rosengren are relevant to our business: Mr. Rosengren indicated that continued low interest rates create future risks for commercial real estate and that the Fed should raise rates soon in order to avoid future volatility in this sector. Stay tuned.
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