For the first quarter of 2017, 30-year Treasury interest rates fell slightly while 30-year Municipal Market Data rates rose slightly. Inflows into municipal bond mutual funds were positive until the November US election, then strongly negative, and then became positive again in mid-January. With President Trump’s election came high expectation of increased fiscal stimulus and a change in the market’s expectations for the path of Fed rate increases. Trade wars, it was imagined by some, would have the potential to reduce economic activity and slow the Fed’s path to higher rates. It is too early to predict if tax reform would have an impact on municipal bonds. Federal Reserve Chairman Yellen said that more interest rate increases would be appropriate if the US economy meets the central bank’s outlook of gradually rising inflation and tighter labor markets. After the increase in the Fed Funds rate in March, the market seems to expect two more increases this year. We plan to maintain a relatively short duration until we see more clarity on legislative plans, and in particular, the details on tax reform that President Trump says are forthcoming.
Information contained herein was obtained from recognized statistical services and other sources believed to be reliable and we therefore cannot make any representation as to its completeness or accuracy. Any statements not of a factual nature constitute opinions which are subject to change without notice.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Saratoga Advantage Trust mutual funds. This and other important information about the Saratoga Advantage Trust's funds is contained in the prospectus, which can be obtained by clicking here, or by calling (800) 807-FUND, and which should be read carefully before investing. The Saratoga Advantage Trust's funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Saratoga Capital Management, LLC is not affiliated with Northern Lights Distributors, LLC. 1/16 © Saratoga Capital Management, LLC; All Rights Reserved.