Tag Archive for: bond market

3 Reasons To Be Very Thankful For Today’s Rates; Wow – Markets Ignore Hot Jobs Report!

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If the spread between the average mortgage rate and the 10-Year Treasury Yield was at 2023 levels, today’s average rate would be 1% higher! (The average rate would be close to 7.4%!). Read More

The Real (Much Bigger) War Behind The Scenes; Why Gold Crashed & It’s Good News!

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Economies can’t handle interest rate shocks (the mortgage industry is a case in point), and the repercussions put politicians in deep peril. So, it is a certainty that nobody is freaking out more than Trump administration officials. This is because oil prices and interest rates are up again today! (Mortgage rates have now climbed almost 5/8%!) But here’s a fascinating and comforting reminder: In 1993 and 1994, 10 Year Treasury Yields rose from 5.2% to over 8.0%! (A 3% increase!) This was in response to Clinton’s efforts to push through a massive stimulus bill that the bond market did not like.Read More

Government Opening Will Impact Mortgages – While The Shutdown Had Minimal Impact; Why?

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The government was shut down for a record 43 days and … the mortgage and real estate industries hardly noticed. We had one flood insurance issue at JVM, but our buyer was able to find private flood insurance that actually turned out to be cheaper. What was most notable to me was how steady interest rates were during most of the shutdown, with one exception. While rates trended downward until late October, there were no spikes because no government reports were released, and those reports (GDP, employment, and inflation) can and do significantly impact rates.Read More

Bond Market Melts Down; Rates Shoot Higher (Again); What’s Really Odd…

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Yesterday, while we lounged on our sun-dappled verandas, savoring the cool sweetness of mint juleps, listening to the meadowlarks sing, and watching butterflies dance in a gentle breeze among blooming roses – the bond market blew up.Read More

Inflation Numbers Shockingly Cool; Bond Market Reigns Supreme; Recession NOT Averted

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Wow part II! There is so much to unpack today. Also, apologies for hitting economics and finance so much lately, but I have never seen anything like this. Good news at the end though…Read More

Inflation Cooled & Rates Plummeted – Are We Saved?

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Today’s Consumer Price Index (CPI) report came in cooler than expected today – and rates fell sharply as a result. This is because the bond market and interest rates are hypersensitive to inflation reports.Read More

Longshoremen Strike and Iran/Israel War – Impact on Rates

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What if farmers went on strike in the 1880s and demanded that farming had to be done without "automation" and that every farmer receive a guaranteed income in the top 15% of Americans? Read More

4 Interesting Observations; Rates Drop 2% Since October; China’s Finally Crashing; History of Stock Market Crashes

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Here are some interesting observations to pique your interest today: Rates have dropped 2% since October, China's bond market is crashing, and as always, stock market crashes seem to catch us off guard. Read More

Huge Myth: Stock Prices Always Rise; Stocks Were FLAT For 45 Years!

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The biggest myth in finance is that stock prices always go up. But – it took a full 25 years for stocks to return to their 1929 highs (in 1954) after the 1929 crash. And after stocks peaked in 1968, it took a full 7 years to return to their peak.Read More

Fed Lost Control Of Interest Rates; Why Massive Government Borrowing Did Not Push Rates Up

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This is another reminder that the Fed only controls the Fed Funds Rate (the overnight lending rate between banks) and that it does not control long-term rates. Long-term rates can plummet or shoot higher, no matter what the Fed does.Read More

Myth: Rate Cuts Help The Economy; Rates Fall To January Levels

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The 10 Year Treasury Yield fell below 4.0% for the first time since late January. This is in response to continuing weak economic signals (particularly in the employment realm), moderating inflation signals, and the belief that Fed Chair Powell will cut rates in September.Read More

Stock Market Is NOT The Economy; Earthquake Tomorrow; Nordstrom Index

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Tomorrow’s earthquake could be in the bond market because retail sales numbers will be released. And last month, bond yields and interest rates plummeted when retail sales numbers came out softer than expected. This is because retail sales are a great indication of the health of our economy - that is 70% consumer spending.Read More

Strong Jobs Report Pushes Rates DOWN? FHA Condo Spot Approvals

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Rates continue to bounce up and down today, but the jobs report clearly should not be taken too seriously, and it appears that the economy is still on very soft footing. Remember too that the jobs market is the last domino to fall when recessions hit.Read More

Why Do We HATE Each Other So Much? And Why Does It Matter For Housing?

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America has not been this contentious or polarized since the Civil War – as most readers know. Many people blame social media for this polarization. The ability to post online without being face-to-face and the ability to post anonymously – seems to foster much more contentious and polarizing discourse.Read More