July Market Rate Update
Each month, the IAACU Small Business Team aims to provide you with insights into the current trends in Commercial Real Estate market rates, which are influenced by movements in the US Treasury yield.
My, how quickly things can change! On July 1st, the 5-year US Treasury yields we’ve been tracking closed at 4.44%. However, a weaker jobs report and the first lower-than-expected inflation report in years have led the Federal Reserve Chairman to suggest that a rate pivot is near. This announcement has triggered a buying frenzy in the US Treasury market, as investors rush to secure the higher-rate Treasury bonds before they disappear. Consequently, the 5-year US Treasury yield has dropped to 4.10% as of July 16, 2024.
Since February, the 5-year Treasury yield has only dipped below 4% twice, on February 1st and 2nd. However, with new inflation data and the Fed’s latest comments, it seems likely that we will soon see the 5-year US Treasury yield fall below 4% again. It hasn't stayed below 4% for an extended period since the three months between March 10, 2023, and June 12, 2023.
What does this mean for business loan rates? We are beginning to quote some business loan deals at rates below 7%. Do you have a client dissatisfied with their current business loan rates? Now is the perfect time to be their hero. Refer them to our business lending department, and we’ll not only highlight the value of your relationship but also save them money when they refinance their business loan with us.
Read our June 2024 Market Rate Update.
*Rates from Resource Center | U.S. Department of the Treasury as of July 17, 2024.