Capital Alert: January 25, 2018

Lenders Respond to Upward Rate Pressure

While U.S Treasury yields have increased during the month, the 10-year yield, currently at 2.64%, has remained stable during the week. Interest rate pressure has been on an upward trend as the U.S. and global economics continue to strengthen. As earning season is now in full swing, investors expect to see positive earnings results, which will certainly play into their attitudes. At this point, lenders have adopted one of three approaches to recent interest rate increases: those looking to gain market share by holding rates down; those that have moved with the market, at least on some basis; and those lenders driven by yield, whose rates were artificially high and now find themselves at market as rates have moved to them. Finding the right capital source has become more critical as a result.