Jack Harty is a Boise based commercial mortgage broker that every once in a while, shares his wit and humor by sending out market updates. This month he timely ties it into the football bowl selection process and Boise State's selection for the Cactus Bowl.
While this is the season when bowls are the topic of interest among football fans, the words “interest” and “bowls” are also linked in matters that have nothing to do with football bowls. The trend of interest rates suggests that at this holiday season, the cheap money punch bowl has been cancelled, i.e., it is being yanked off the table.
November 2016 was the worst month for Treasury bonds since December 2009. December 2016 is starting off with the same upward momentum in 10 Yr T Yield. As of mid-day 12/1/16 the 10 Yr T Yield traded as high as 2.49% and closed at 2.44%.
In comparison, on Election Day (11/8/16) the 10 yr T was at 1.88%.
The historic low point for 10 Yr T Yield (by historic I mean the lowest yield ever offered since the First US Congress authorized issuance of bonds in 1790 to pay for the Revolutionary War) occurred recently (7/5/16) when the 10 yr T Yield dropped to 1.37%.
The following chart tells it all:
10 Yr T Yield - Past 6 Months
Anyone who locked [their] rate on any day prior to today is better off than had they locked [their] rate today. Currently the 10 Yr T Yield is >100 basis points higher than its historic low point in July. It is 56 basis points higher than where it stood on Election Day - a mere three weeks ago.
For those who long for a return to historically low interest rates, the best strategy is to pray for economic problems to be perceived by market participants as threatening in Europe, China or the rest of Asia. If that occurs, then the US Treasury bond can re-assume its traditional role as the perceived “safe haven” to perceived economic problems elsewhere. Pray for bad economic news if you intend to lock [your] rate in the near term.
HARTY MORTGAGE ADVISORS
121 N. 9th St. - Ste 402
Boise ID 83702
Direct: 208 514 4766
Main: 208 344 4141
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