Treasuries yields rising as fed cuts

[Anonymous]

Guess the market doesn't believe the fake inflation numbers, shocking.

[Anonymous]

This is what I kept telling people who said they might look to buy/refinance after the Fed cut rates. Fed only directly controls short-term rates.

Long-term rates are tied to future growth and inflation expectations- unless the Fed does quantitative easing. I expect that to be the next step in 2026, trying to drive down long term rates, but the impact will be more inflation as cash is injected into the economy.

https://www.reuters.com/markets/us/fed-could-surprise-market-with-t-bill-buying-binge-2025-12-09/

QE is only really a good idea when inflation is very low or even negative, since it is fundamentally inflationary. It will be "exciting" to see what these jabronis do to the economy when they try it in an inflationary economy.

[Anonymous]

Cutting short term rates increases spending and borrowing on short end which brings inflation which will then cause long term rates to rise.

[Anonymous]

Hey, maybe I bonds will reach 10% this time.

[Anonymous]

Anonymous wrote:This is what I kept telling people who said they might look to buy/refinance after the Fed cut rates. Fed only directly controls short-term rates.

Long-term rates are tied to future growth and inflation expectations- unless the Fed does quantitative easing. I expect that to be the next step in 2026, trying to drive down long term rates, but the impact will be more inflation as cash is injected into the economy.

https://www.reuters.com/markets/us/fed-could-surprise-market-with-t-bill-buying-binge-2025-12-09/

QE is only really a good idea when inflation is very low or even negative, since it is fundamentally inflationary. It will be "exciting" to see what these jabronis do to the economy when they try it in an inflationary economy.

There it is. From Fed interest rate cut news: "The Fed also announced on Wednesday that it would begin to buy Treasury securities as part of an effort to ensure that there is enough cash in the banking system to ensure that short-term borrowing costs do not inadvertently spike. "

[Anonymous]

Q for all you econ geniuses: Should we refinance our 7 percent 30-year mortgage now, or wait to see if next year rates drop into the lower 6 percent range or even below that?

I know there's no timing the market, but also think the messages above seem to be saying QE could create inflation which could send mortgage rates higher next year?

[Anonymous]

Anonymous wrote:Q for all you econ geniuses: Should we refinance our 7 percent 30-year mortgage now, or wait to see if next year rates drop into the lower 6 percent range or even below that?

I know there's no timing the market, but also think the messages above seem to be saying QE could create inflation which could send mortgage rates higher next year?

Who knows. One of the ways they have done QE in the past has been to buy mortgage bonds, which drives rates in that market down (this is what they did in 2020/2021, that's why mortgage rates were so low then).

[Anonymous]

Anonymous wrote:Q for all you econ geniuses: Should we refinance our 7 percent 30-year mortgage now, or wait to see if next year rates drop into the lower 6 percent range or even below that?

I know there's no timing the market, but also think the messages above seem to be saying QE could create inflation which could send mortgage rates higher next year?

Refinance now and do NOT pay any points. You need to get three quotes from different mortgage brokers and play them off each other. Drive the cost of refinancing to as low as possible.

Refinance again in a year if rates go down by another 50-75 bps. The bigger your borrowed amount the less you need rates to drop to make serial refinancing "worth it."