The SBA and PROducent

Producent

pro·du·cent

one that produces (as a witness or a document) from Latin pro "before, forth" + ducere "to bring, lead"

This is really just a fancy way to say producer.   In legal terms it is one that exhibits; one that offers.

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PROTREPTIC OF THE WEEK

 

The new administrator of the SBA was the producent of a policy notice (5000-865754) that now requires ALL owners (100%) of a small business applying for financial assistance must either be US Citizen or Lawful Permanent Resident.

 

In addition, SBA faces a programmatic shutdown on March 14th.   As of March 4, total 7(a) gross volume since October 1 is now $14,988,635,600 leaving only $831,987,688 million available in authority.

 

This allows for about $83.2 million/day.   Last Tuesday saw $193.1 million in gross volume for just that one day.

 

The current Continuing Resolution, which funds the government expires Friday, March 14 at midnight.

 

Another continuing resolution or a government shutdown will occur.

 

SSBCI guarantees are NOT impacted.

 

It would be proficuous to know the difference.

 

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Indices:

PRIME RATE= 7.50%

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SBA 504 Loan Debenture Rate for MARCH

 

For 20 year debentures, the debenture rate is only 4.97% but note rate is 4.82471% and the effective yield is 6.315%.

For 25 year debentures, the debenture rate is only 4.97% but note rate is 5.02251% and the effective yield is 6.246%.

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AHEAD OF THE YIELD CURVE

 

The producents at the Federal Reserve meet on monetary policy March 18 and 19.

 

Prospicient prognostications proliferate with our procurators of interest rates, the Federal Reserve.

 

30-Day Fed Fund futures pricing data have long been relied upon to express the market’s views on the likelihood of changes in U.S. monetary policy.

 

Here are the Futures Implied Fed Funds

Mar-31-2025      4.32750

May-30-2025      4.25000

Aug-29-2025       3.94500

Nov-28-2025      3.70500

Feb-27-2026       3.58000

Aug-31-2026       3.47500

Feb-26-2027       3.36500

 

What does all this mean?

 

I don't know.

 

The current fed funds target rate is 4.25% to 4.50%.

 

The long end of the yield curve usually prognosticates inflationary expectations and ultimately market rate expectations.

 

Last month’s auction of 30 year treasury bonds had a high yield of 4.748 percent versus 4.913 percent a month ago.

 

This week the auction will be on Thursday for $22 billion.    This continues to be a reduced offering compared to a $25 billion average a year ago.

 

As a result, the reduced supply has caused prices to go up causing the yields to go down.

 

On the shorter end of the curve, auction sizes for both the three month and six month weekly auctions are still at near record levels.   Last week the auction size for the three month treasury bill was $76 billion.

 

More procellous promulgations on the yield curve’s slope is profligate.

 

 

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OFF BASE

 

The day after daylight savings is not a holiday.

 

Saint Patrick’s Day isn’t either.

 

Our next holiday is not until Memorial Day.

 

Here are the upcoming Federal Reserve Holidays:

 

Monday, May 26: Memorial Day

Thursday, June 19: Juneteenth

Friday, July 4: Fourth of July

Monday, Sept. 1: Labor Day

Monday, Oct. 13: Columbus Day

Thursday, Nov. 27: Thanksgiving

Thursday, Dec. 25: Christmas