Good Tuesday morning from your Hometown Lender,

Retail sales were the big economic release today and they came in stronger than expected across the board. Bonds lost some ground early and have since moved back into positive territory with the 10-year yield back below 4.20%. Markets are still encouraged by Mr. Powell’s testimony last week and follow-up conversation at the Washington Economics Club yesterday as he telegraphed a Fed rate cut was coming. Markets (as is typical), are getting ahead of their skis and are now predicting three cuts this year. That would be great but I am not betting on that, especially with the anticipated volatility surrounding the elections. I would probably float rates today as reprice risk is low at the moment.

On the elections, there was an interesting post from Bloomberg:

The momentum behind Trump’s presidential bid has put pressure on long-term Treasuries, sending their yields higher on the view that his policies would worsen the country’s finances and fan inflation. That “Trump trade” is rewarding investors who had bet the bond market curve would return to normal. For that trade to really take hold, however, it would take an interest-rate cut from the Fed, which Goldman Sachs economists think looks justified for July. And investors are increasingly pricing that in too, with Treasuries rallying and 10-year yields near the lowest since March.

Stay safe and make today great!