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Thread: ALL BUSINESS: Bond-market rout lifts mortgage cost

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    ALL BUSINESS: Bond-market rout lifts mortgage cost

    NEW YORK (AP) - The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
    But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
    That's the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won't be able to afford.
    To understand how this is all connected, you have to think like a bond trader. Inflation is their enemy because it means the purchasing power of the dollars they receive when bonds eventually are paid off will be diminished. The only question is by how much.
    Yields on 10-year Treasury notes, a benchmark for home mortgages and other consumers loans, jumped from 2.5 percent in March around the time of the Fed announcement to as high as 3.7 percent in recent days as signs that efforts to stabilize the financial system and economy were starting to pay off. And 30-year mortgage rates jumped more than a quarter-point this week to 5.29 percent, the highest level since December, Freddie Mac reported.
    "If the meltdown continues in the bond market, then mortgage yields will soon be at levels that choke off refinancing activity," said economist Ed Yardeni, who runs his own investment firm. "Even worse, they could abort any necessary recovery in home sales and prices."
    Translation:
    Government spending and social programs an economy does not help.
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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    Re: ALL BUSINESS: Bond-market rout lifts mortgage cost

    You lacked to include a link so I can read more.

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    Re: ALL BUSINESS: Bond-market rout lifts mortgage cost

    Quote Originally Posted by Redress View Post
    You lacked to include a link so I can read more.
    THE HELLS?>


    GRRR Sorry bout that.


    My Way News - ALL BUSINESS: Bond-market rout lifts mortgage cost
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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