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10 year muni’s were yielding a little north of 1% to begin the year and are now around 2.60%. 2 year AAA muni’s were yielding 22 basis points to begin the year and are now around 1.75%.
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10 year A rated corporate bonds were around a 2.25% yield at the beginning of the year and are now hovering around 4.40%. 2 year A rated corporate bonds were yielding around 90 basis points at the beginning of this year and are around 3.44% now. Yields have also increased in corporate and municipal bonds. The 10 year opened the year at a 1.51% yield and is around 3.24% now. If you look at what Treasuries have done year to date, the 2 year has gone from a 0.73% yield to around a yield of 3.20%. These moves have also created higher rates on longer dated fixed income securities.
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As of this writing, the Fed is expected to increase this rate as much as 250 basis points between now and the end of the year. The effective rate for Fed Funds is at 83 basis points currently and is expected with anticipation of another 50-75 basis points increase at the June 15 meeting. The Effective Fed Funds rate hovered between 5 and 10 basis points between April ’20 and March ’22. The Federal Funds Effective rate (Fed Funds) is the percent at which banks lend and borrow from each other overnight. To combat elevated inflation, the Fed is becoming more aggressive in raising short term interest rates.