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October 13, 2005

Yields on the move, Thurs., Oct. 13, 2005, 11:26 AM

With U.S. Treasury yields moving quickly higher, particularly in the important 2-year and 10-year Treasury paper, it ought not to be surprising to watch mortgage rates take a big jump. Are variable-rate mortgaged homeowners ready for the shock and awe they will be staring at soon?

Can the tipping point be far away for the real estate market?

In the past month, the annual yield on the 10-year T-Note has gone from 4.13 to 4.47 pct. The yield on the 2-year T-Note has risen from 3.85 to 4.23 pct. These are increases of 34 and 38 basis points respectively.

This move is due to inflation concerns.

The people who ought to be most worried are those who a few months ago were so enjoying the impact of inflation on their own home prices.

Can you say the word, deflation"?

Posted by Posted by Bill Cara on October 13, 2005 11:27:35 AM | Category: Bonds