Chris Lau - Seeking Alpha

Thursday, May 28, 2009

What Low Mortgage Rates (U.S.)?

A few months ago, I complained about the Fed use of its own "money" to buy its own debt. My rule of not betting against the Fed was true for a short period of time: the 30 year treasury bonds rallied.

Since then, macroeconomic dynamics have worked its way to make an even truer "truism" true (awkward triple use of the same word intended):
If it's too good to be true, then it probably is.

Below are two articles explaining the shift in interest rates. Consumers might see mortgage rates rise.

This trend might continue, and the result will be higher mortgage rates. Mr. Market has an immune system and is reacting to the free-spending grand experiment of Keynesian economic theory.

http://globaleconomicanalysis.blogspot.com/2009/05/treasuries-massacred-yield-curve.html

http://www.calculatedriskblog.com/2009/05/record-high-yield-curve.html
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