Review
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On January 23, 2019, we provided our first downside targets for interest rates. At the time, we had the 3-month treasury slated for a potential downside (in the extreme) of 0.83% from the level of 2.45%.
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On April 23, 2019, with the 3-month Treasury at 2.45%, we said the following: “If the current run of stability in rates is anything like the period of 2015 to 2016, we should see a sharp drop in rates as was seen in the period from September 12, 2016 to September 22, 2016. At that time, the 3-month treasury dropped from 0.37% to 0.18%, a decline of -51%.”
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On December 6, 2019, with the 3-month Treasury at 1.53%, we said: “If the November 1, 2019 low, at 1.52%, is broken then we can reasonably expect at least another decline to the 1.30% level and maybe more before another rate cut by the Federal Reserve.”
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On March 3, 2020, when the 3-month Treasury sat at 0.95%, the Fed decided to do an “emergency cut” in interest rates.
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On March 4, 2020, the 3-month Treasury sits at 0.72%.
Update
Slow and steady is the pace of our analysis. So far, we’re on track. The chart below says it all.
