Market Review

The U.S. economy began 2015 at a feeble pace, weighed down by the West Coast port closing and a brutal winter through the central and eastern portions of the country. Reflecting the economic softness, interest rates fell dramatically during January 2015, with U.S. Treasury benchmarks hitting their low yields for the year by February 1. The 10-year was a stunning 46 bps lower for the month, yielding 1.77% on January 31, with some market prognosticators proclaimed it was headed toward 1.25%. 

Instead the weakness proved transitory. When rates bounced back in the spring, they remained in a relatively tight range. This was surprising given the elevated geopolitical and economic events.