Correspondent Blog

Treasury Rally Continues Despite Strong March Numbers The market received a boatload of data yesterday that was unambiguously strong and Treasury prices curiously rallied in response.  After reaching a pandemic high yield of 1.74% on March 31, the 10-year note has rallied throughout April dipping to 1.55% yesterday. That’s a level last seen on March…

Fund managers were polled by Bank of America recently and they now see inflation, a taper tantrum, and higher taxes as bigger risks than COVID-19. That poll came before the Johnson & Johnson vaccine news so don’t write-off the virus just yet but the trend is definitely in that direction. As for inflation, we got…

As a banker, you undoubtedly keep an eye on the trends of Bitcoin, Ethereum, and other cryptocurrencies. Their huge popularity must have you thinking about the future of money. Like JP Morgan Chase CEO Jamie Dimon, you were probably against these currencies to start and now have come around to being more open to them,…

March CPI and Retail Sales With Plenty of Fed Speak It’s another full week of Fed speakers after an informative FOMC minutes from the March meeting and Fed speeches last week. A total of eleven Fed officials will offer their views with the highlight being Fed Chair Powell tomorrow at the Economic Club of Washington….

Some economists, Fed officials, and pundits are making the argument that while inflation may run hot for the next year or so, the risks of long-term high inflation is not pronounced and inflation will be capped at around 3% in the near future, and the probability of runaway inflation is next to nil.  This is…

Examining Bond Portfolio Trends: First Quarter 2021 Beginning in May 2012 we started tracking  portfolio trends of our bond accounting customers here at the Correspondent Division of SouthState Bank.  At present, we account for over 130 client portfolios with a combined book value of $14.3 billion, or $110 million on average per portfolio.  Twelve months…

So far this week we have been impressed with the ability of the Treasury market to essentially shrug off a string of strong first-tier reports. While the latest ISM Manufacturing Index set a 37-year high, the March jobs report soared over expectations, and the ISM Services Index hit a new all-time high for March, Treasuries…

The combination of the greater pandemic-induced adoption of banking technology, higher branch operating costs, a greater number of workers working from their homes, and the changing needs of those workers, has altered branch mathematics and profitability. In this article, we look at the game theory behind branching and why there is a new equation for…

Most community banks will find it challenging to meet their loan growth targets in 2021.  Part of the challenge is lack of loan demand, elevated and rising loan payoffs, and stiff competition.  Therefore, most community banks conclude that they do not want to sell participation in a good commercial loan to another lender. However, selling…

Will the Fed Blink after the Jobs Report? While the main headlines this week will be about the upcoming battle over the Biden Administration’s infrastructure bill, that will be a more lengthy affair than the short attention spans of traders can stand. They will be more focused on digesting the March job report and looking…

Economic News The March Employment Report easily beat expectations of 660,000 new jobs with 916,000 jobs created. Private payrolls posted 780,000 new jobs versus 643,000 expected. In addition, the prior two months were adjusted higher with 156,000 more jobs than initially reported. So, after some softness in December and January, the labor market appears to…

While all eyes will be on the Friday jobs report, other recent economic releases point to an expected surge in consumer spending in March and the months ahead which bodes well for economic growth and maybe more fuel for yields to rise. The jobs numbers may be the cherry atop the cake at this point….