OT: Mortgage interest rates climbing…

[Coronita]

Wouldn’t you know it… The time I’m considering a refinance (again), rates have been going up and up….

Geesh…..

[Huckleberry]

Do you think they’ll keep going up or will the Fed push them back down to continue stimulating the housing sector?

[SD Realtor]

Rates will follow the treasury yields, not what the fed says or does.

[Diego Mamani]

[quote=SD Realtor]Rates will follow the treasury yields, not what the fed says or does.[/quote]
Exactly. The Fed can affect short term interest rates, but mortgage rates are largely determined by the bond market.

[Huckleberry]

Sure, but the Fed is the one in control of Quantitative Easing (QE) and Operation Twist which we have all heard so much about.

These programs/policies have the effect of pushing down long term rates.

Do you think they will continue these programs or finally let the free markets do what they need to?

[sdrealtor]

No one knows but my guess is more of the same and rates go back to where they were. That of course is merely an opinion.

[SD Realtor]

Once more it is the 10 year treasury yield. What you have to understand is that the moves that the fed makes may or may not move the yields of the treasury. These yields depend on the bond markets. These markets vary based on alot of different factors including but not limited to the perception of the USA. This perception is a bundle of things… strength of the currency, economic policies, perception of how much we can be trusted to pay back the principle, etc… Finally there is an assessment of where are there other opportunities to get the same or better yield with the same amount of risk.

If the treasury yields were only going to be based on our idiot fed policies, rates would be sky high several years ago.

[Huckleberry]

Okay, so based on all of your points on how the 10 year treasury yield is derived, where do you think long term (10 yr.) rates go from here through the end of 2012?

[The-Shoveler]

Unless the Prez (or something else) reins them in , I am supremely confident the fed can buy an unlimited number treasures and keep rates exactly where they want.
(Inflation is an entirely different matter however),
NOTE:
They print the money, they return every dime profit back to the U.S. treasury once everyyear.
There are very few Gov’s out there that can do that, we can “BECAUSE WE DON’T REALLY NEED ANYONE ELSE, THEY NEED US A LOT MORE THAN WE NEED THEM”
At least for now.

[SD Realtor]

I would say rates will not change significantly in the short term.

We may have a lost decade like Japan… we may not.

Eventually it will catch up with us. Go to the top of the page and read the post by Rich called “United States Headed for Its Own Debt Crisis.” It makes alot of sense.

So for now the world just smiles and we keep kicking the can down the road….

Someday though it will catch up.

[ocrenter]

[quote=SD Realtor]I would say rates will not change significantly in the short term.

We may have a lost decade like Japan… we may not.

Eventually it will catch up with us. Go to the top of the page and read the post by Rich called “United States Headed for Its Own Debt Crisis.” It makes alot of sense.

So for now the world just smiles and we keep kicking the can down the road….

Someday though it will catch up.[/quote]

We are already into the 5th year of our lost decade.

[SD Realtor]

I would agree with that…

[briansd1]

[quote=ocrenter]

We are already into the 5th year of our lost decade.[/quote]

I’ve been watching Japan with fascination.

I think it’s globalization at work. Despite massive government borrowing and a stagnant economy, there was deflation in Japan because of competition from abroad. So rather than collapse all at once, prices in Japan have stagnated while other countries in the region catch up.

We are seeing the rise of global pricing where goods, especially branded goods, around the world go for the same price.

Services next? Maybe not haircuts and gardening or salaries, but services such as legal, accounting, integration services by big companies such as IBM are being priced very much the same… The brave new world.

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