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Tracking Stable Value Yield Spreads

Long term Treasury yields have continued to fall due to the buyback of US Treasury debt with the 30 Yr. Treasury Bond yielding 6.01% as of 5/31. Conversely, tight monetary policy has resulted in upward pressure on short-term rates. The Federal Reserve increased the federal funds rate in March by 25 basis points and again in May by 50 basis points attempting to cool off the economy and potential inflation pressures. Credit spreads have remained under upward pressure across all sectors. Five-year GIC spreads have widened 28 basis points since 2/29 to 130 basis points over Treasuries.

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