Incredible Finish to the Week in the Income Markets

After toying with 3% earlier in the week the 10 year treasury fell by 5 basis points today to end the week at 2.87%.

This was a welcome respite for income investors as those holding some of the higher yielding perpetual preferreds saw a couple nice bounces this week which in may cases got recent investors in shares close to break even (or even in the green).

Hardly ever do interest rates move in a straight line–they wiggle up and down, but the trend remains higher. Regardless we are happy to see a nice bounce which helps to ease the pain a bit for now.

The Fed has been a bit of a help this month as thus far they have only had about a $7 billion run off the balance sheet thus far and have made some sizable purchases during the treasury auctions in the last week. Are they going to remain on their advertised $20 billion/month of runoffs? Who knows?

The Medium Duration Income Portfolio turned ‘green’ today with the help of the silly Sotherly Hotels baby bond. We didn’t think we would see green again until mid year as we thought capital losses would outweigh dividends/interest received–always nice to get a bit of a surprise.

We are looking forward to next week–I should get a life I guess. When you are looking forward to next week in the interest rate complex with so much anticipation something is lacking in ones life.

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