EC SD | Deltamudd - 8/15/2024 14:12
>high interest rates
I would not say that interest rates are high. Yes, higher than the last couple decades, but not high compared to the decades prior...
The 10 year yield is currently below 4% and most mortgage notes are indexed to this yield. Will it go lower soon with Fed rate cuts being discussed? Don't assume this...
The Treasury has been issuing trillions of new debt on the short duration end of the yield curve for over a year now. This is a highly unusual move for highly political reasons. The yield curve is inverted after all, so this "stunt" by Treasury is costing the taxpayers billions of extra interest. All of that will come due soon and need to be reissued. At the same time, trillions more of deficit spending will need to be financed with additional debt. This will likely cause a massive flood of 10 year durations starting next year. When that happens, it is likely the 10 year yield will go higher, not lower, starting next year.
BTW, this prediction of higher 10 year yields ahead came from a very experienced bond trader this week... |
LAND
