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mgubnyc1.
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August 29, 2007 at 4:15 PM #10099August 29, 2007 at 6:14 PM #82486
mgubnyc1
ParticipantSince the mortgage rates are somehow tied to the this 10yr bond why haven’t the rates come down?
August 29, 2007 at 7:32 PM #82499(former)FormerSanDiegan
ParticipantSince the mortgage rates are somehow tied to the this 10yr bond why haven’t the rates come down?
Risk Premium
August 29, 2007 at 9:03 PM #82506cr
ParticipantI read somewhere today that the FF rate is higher than the other major rates, and the conclusion was that they are sending a message to the FED come their meeting 2 weeks from now.
I still think Helicopter boy is stuck: he lowers the rate inflation goes up, he raises or even leaves it, the bulls will flee, market dives, and housing, well housing is screwed either way.
Will he stick to his Anti-inflation shtick, or will he fold to political pressure?
These days I don’t think anyone knows.
August 29, 2007 at 9:08 PM #82507waiting hawk
Participant“Will he stick to his Anti-inflation shtick, or will he fold to political pressure?
These days I don’t think anyone knows.”Let me give you a Jim Cramer booyaahh for that one. Spot on!
August 29, 2007 at 9:50 PM #82515pepsi
ParticipantThere is no way that inflation will come down anytime soon. Just talked to our China supplier and guess what, since Jun, the price has gone up 10% for the exact same item. This is mainly caused by the exchange rate and the labor cost over there. China does not make the high end stuff that North America (i.e Canada) makes, but they cover a lot of low end merchandise in Wal Mart.
And I think those low end stuff collectively have a lot of weight in our CPI.
August 29, 2007 at 10:01 PM #82516SD Realtor
ParticipantThat was the exact point of my post. That even with the low 10 yr yield, mortgage rates are not as low as they were at this time last year when the 10 year bottomed at this level. Conforming are pretty close but other loan programs are not. The premium for moving mortgages on the secondary market is definitely the culprit. The fact that the 10 year has come down is what has kept mortgage rates where they are. If the secondary market remains this tight when the 10 year yield does reverse trend and goes up then we will see a more restrictive environment to say the least.
SD Realtor
ps = helicopter boy is in a tight spot… my wish is that he doesn’t touch the rate. However I give it a 75% chance that he will bow to pressure and knock it down at least 25 bp. I REALLY hope I am wrong.
August 29, 2007 at 10:27 PM #82523HereWeGo
Participant75 bps seems more likely, given the current yield on the 91-day.
August 29, 2007 at 10:54 PM #82529Participant75 bp in one swoop! hohoho… I guess stranger things have happened.
SD Realtor
August 30, 2007 at 10:15 AM #82577ParticipantNo doubt whatever political nonsenscial jargon Helicopter boy says tomorrow will be analyzed ad nauseum.
As far as inflation, I’m in imports too. There’s a little thing called VAT that I am really surprised has not made more headlines. In one fell swoop it raised prices on thousands of China commodities anywhere from 2-8%, overnight! Rumor is that may happen again at another 3-5%.
Then there’s the currency, which every single day appreciates to the dollar. Today it’s 7.56:1, a year ago it was 7.92:1. Rumor there is it will go to 7.3:1 by the end of the year. Labor costs are rising as a result, and so are material costs.
Of course we only need to worry about “core” inflation, because food and energy costs haven’t gone up 20% this year either.
August 30, 2007 at 12:51 PM #82595ParticipantWe’ll see. I can’t see the Fed allowing the difference between Treasury yields and the FFR to be so large.
August 30, 2007 at 12:56 PM #82596donaldduckmoore
ParticipantIf the FED thinks inflation is still a concern, they should not lower the rate. And I don’t think they should lower the rate. Lowering the rate may cool down the market temporarily, but the dollar hurts, inflation goes up. More damaging effects than expected. Besides, they have to raise the rate later again and that will cause psychological turmoil in Wall Street again. Lowering the rate is not an option. It is just some loser like Cramer who is yelling to keep the rate low in order to save his ass.
August 30, 2007 at 1:03 PM #82598bsrsharma
ParticipantI can't see the Fed allowing the difference between Treasury yields and the FFR to be so large.
Can you please explain why? Let us say it is 5% (a random figure). Whom does it hurt (and who benefits)?
August 30, 2007 at 5:29 PM #82644ParticipantIs it possible that if the fed does lower the rate 1%, mortgage rates won’t be any lower. I always thought that mortgage rates were tied to the 10yr bond
August 30, 2007 at 5:38 PM #82646Anonymous
GuestRecently, the yield on the 10-yr has been going down, but mortgage rates are still going up. So, mortgage rates might not be affected at all if the Fed lowers rates.
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