August Market Review 2018

Against a backdrop of record setting equity markets, sinking emerging market currencies, potential trade wars (and resolutions thereof), strong corporate profits, and solid domestic economic growth, bond markets were fairly sanguine during the month of August. The 10-year U.S. Treasury note closed the month at a yield of 2.84%, about 12 basis points (bps) lower than where it began. The 2-year note fell 5 bps, as the yield curve maintained its flattening trend.

Employment data continues to be particularly strong, retail sales were up, and second quarter GDP hit 4.2%. Inflation, while meeting analyst expectations, continues to trend upward at a mild pace. Wage growth is still lagging and housing has begun to appear as the weak spot in economic news reports.

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