MSF 10-Year UST Prediction MBA

Posted by Jarvis Woodson on May 16, 2019
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This year, for what we estimate to be the 30th consecutive time, the MSF team attended The MBA/CREF Conference - a four-day event held in San Diego in which more than 3,000 commercial real estate finance professionals gather to discuss market trends, expectations and, of course, to network, discuss deals and strengthen relationships. The MBA/CREF Conference is the country’s largest gathering of real estate finance professionals.

While in San Diego, we took the opportunity to host a private mixer consisting of 25 industry professionals. These individuals are some of the greatest minds in lending that we provide a private dinner for as an opportunity not only to network but also to discuss ideas, predictions and overall feedback of the current CRE landscape. Last year we decided to start a friendly competition we’re dubbing, the “Treasury Forecasting Challenge”.

 

How MSF’s Treasury Forecasting Challenge works:

For the competition, which internally we call the “MSF Interest Rate Poll,” each individual provided a prediction of what the 10-year United States Treasury Bond Yield would be at market close on December 31st per the Wall Street Journal. The owner of the closest prediction was awarded the opportunity to select the recipient of a charitable donation in their name. The prediction results from last year are as follows:

 

Treasury Bond Yield Chart-01 (1)

 

 The actual rate of the 10-year United States Treasury Bond Yield at close (12/31/2018) was 2.69

Our very own, Jeff Morris, won the challenge and donated the winnings to the Columbus women and children’s homeless shelter.

 

What are the future predictions for the 10-year United States Treasury Bond Yield rate at market close on December 31st, 2019? 

2019 Stats of the 10-year United States Treasury Bond Yield

There were 38 guests in attendance.

  • 10-year United States Treasury Bond Yield Rate on Evening of the First Dinner: 2.66
  • The 10-year United States Treasury Bond Yield Rate Prediction on Evening of the Second Dinner: 2.70
  • Low Prediction of the 10-year United States Treasury Bond Yield: 2.30
  • Median Prediction of the 10-year United States Treasury Bond Yield: 2.76
  • Average Prediction of the 10-year United States Treasury Bond Yield: 2.80
  • High Prediction of the 10-year United States Treasury Bond Yield: 3.69



What does the 10-year United States Treasury Bond Yield mean?

Keep in mind that anything in the world can have an impact on these rates. Events such as the decision to pull Amazon’s HQ2 plans in New York, corporate earnings reports and bankruptcies, and government decisions can hold a place in determining these rates. Among our group of professionals that routinely pay close attention to the direction of interest rates, predictions were significantly lower this year than last. The informal and unofficial perspective of the “MSF Interest Rate Poll” is that long-term interest rates will be relatively stable in 2019. The range of opinions was also much tighter suggesting a higher degree of collective confidence in these predictions.

 

Now it’s your turn. Where do you think the US Treasury Bond Yield will be on market close December 31st, 2019? Any guesses?

 

Topics: Interest Rates, Commercial Real Estate, Trending