Comments for Mortgage Rates Higher Due to the 10 Year Treasury Rate? »
Posted By ChangeToday 5 months, 4 weeks ago in NewsWe currently find the 10 year treasury rate at the bottom of an upward trend channel. Not only is it at the bottom of the trend channel, it is also extremely close to the 50 day moving average would should serve as support also. Unless the government does something to send the 10 year lower, it looks as if the selloff will end in the next few weeks. If supoort does how, look for the 10 year treasury rate to work its way back up to 4% which would mean mortgage rates would move higher towards 6%.
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nostalgia5 months, 4 weeks ago
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What will stop the insane spending and borrowing in Washington is the bond market
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As countries refuse to buy our debt the interest rates on bonds will have to rise
As the rates on 10 year notes increase mortgage rates will rise
Here is a good article from May
Return of the Bond Market Vigilantes?
We have not heard much about the bond market vigilantes since the early years of the Clinton presidency. But now, they’re back!
James Carville, famously quipped that in his next existence he wanted to come back as the bond market because it could intimidate everyone. What Carville and President Clinton grasped back then is that there is a limit to the level of deficit spending that can be absorbed without triggering higher inflation.
Unfortunately, that lesson may have to be relearned as this Bloomberg piece indicates [emphasis added]:
Bond Market Vigilantes Confront Obama as Housing Falters (Bloomberg, May 29, 2009, Liz Capo McCormick and Daniel Kruger)
For the first time since another Democrat occupied the White House, investors from Beijing to Zurich are challenging a president’s attempts to revive the economy with record deficit spending. Fifteen years after forcing Bill Clinton to abandon his own stimulus plans, the so-called bond vigilantes are punishing Barack Obama for quadrupling the budget shortfall to $1.85 trillion. By driving up yields on U.S. debt, they are also threatening to derail Federal Reserve Chairman Ben S. Bernanke’s efforts to cut borrowing costs for businesses and consumers.
The 1.5-percentage-point rise in 10-year Treasury yields this year pushed interest rates on 30-year fixed mortgages to above 5 percent for the first time since before Bernanke announced on March 18 that the central bank would start printing money to buy financial assets. Treasuries have lost 5.1 percent in their worst annual start since Merrill Lynch & Co. began its Treasury Master Index in 1977.
http://seekingalpha.com/article/140498-return-of-t... -
7thspagesComment removed: Hard Banned
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