The 10 year Treasury yield dropped as low as 1.87% this week, before climbing up to 1.93% today, despite a lackluster durable goods report. The report indicated a drop in business spending and investment. Equities dropped (Dow down almost 300) as this lowered investor expectations for 2015 first quarter GDP and earnings. Also, markets are still digesting last week’s Fed statement and some recent speeches by Fed officials. The consensus is not so much focused on the predicted first increase (“liftoff” in Fed speak), which is now moved from June to September; but the pace of increases. The Fed’s own prediction for year end 2015’s discount rate is 0.625%, down from December’s estimate of 1.125%. Last weeks’ new increasing “uncertain” Fed stance combined with other central banks tightening and/or loosening has caused a spike in currency volatility. This is creating a more difficult environment for efficient buying and selling of bonds. This inefficiency may have obviously unintended consequences for capital markets, etc…stay tuned… David R. Pascale, Jr.