When will rates come down again?

[Anonymous]

Anonymous wrote:It doesn’t matter if trump or his roadie lowers the fed funds rate to zero: mortgage rates are determined by the 10 year treasury rate, which is determined by supply/demand in the treasury auction market. If investors are at all spooked by increasing debt levels or potential inflation, they will demand a higher rate in those auctions, toadies be damned.

Fed will QE again like they've done 5 times before
Biden era printed more money than ever and historic inflation. ... Fed bought 1 percent bonds. Trump has restored order.

[Anonymous]

Anonymous wrote:It doesn’t matter if trump or his roadie lowers the fed funds rate to zero: mortgage rates are determined by the 10 year treasury rate, which is determined by supply/demand in the treasury auction market. If investors are at all spooked by increasing debt levels or potential inflation, they will demand a higher rate in those auctions, toadies be damned.

Yup, and we aren't far off from a Treasury market crisis like what happened to the UK because of Liz Truss in 2022. The idea that the Fed can just QE themselves around it is just foolish- that sort of thing only works when you still have strong fundamental external demand. That's why QE didn't drastically impact inflation before. Not the situation anymore. If we print trillions, the induced inflation will just get priced into interest rates and will go down in inflationary spiral.

Also it's funny to have people yet again seem to forget who was president in 2020. That was the last time the Fed did a QE program- QE4. In fact, the Fed has reduced it's balance sheet since June 2022- now just under $7 trillion, from $9 trillion in summer 2022.

https://www.pgpf.org/article/how-do-quantitative-easing-and-tightening-affect-the-federal-budget/

[Anonymous]

Anonymous wrote:

Anonymous wrote:Bummer for you. I refinanced in the end of 2021 and got an ARM with an interest rate of 1.7 percent — 1.7 percent! — for the first seven years. I still have more than three years left at that rate. After that, the loan adjusts every year but has a five percentage point lifetime cap meaning the worst I can ever get is 6.7%, which isn’t that much higher than rates are right now. I was a very smart about this.

No you weren't. I got a fixed 30 year mortgage in 2021 at 2.5. If I am still paying off that mortgage in 2051 (which I probably won't be) it will still be at 2.5. Unless you are going to pay off an ARM before the reset, it is not a good bet.

It was an excellent bet. I don’t plan on living there forever. And for the first seven years I will be saving thousands of dollars in interest compared to your 2.5%. So, you don’t have to worry about me.

[Anonymous]

If we become the UK then the bond markets tell us what to do not vice versa. I am nervous that will happen and wouldn’t not count on rates ever coming down but I could certainly be overly pessimistic

[Anonymous]

Anonymous wrote:

Anonymous wrote:It doesn’t matter if trump or his roadie lowers the fed funds rate to zero: mortgage rates are determined by the 10 year treasury rate, which is determined by supply/demand in the treasury auction market. If investors are at all spooked by increasing debt levels or potential inflation, they will demand a higher rate in those auctions, toadies be damned.

Yup, and we aren't far off from a Treasury market crisis like what happened to the UK because of Liz Truss in 2022. The idea that the Fed can just QE themselves around it is just foolish- that sort of thing only works when you still have strong fundamental external demand. That's why QE didn't drastically impact inflation before. Not the situation anymore. If we print trillions, the induced inflation will just get priced into interest rates and will go down in inflationary spiral.

Also it's funny to have people yet again seem to forget who was president in 2020. That was the last time the Fed did a QE program- QE4. In fact, the Fed has reduced it's balance sheet since June 2022- now just under $7 trillion, from $9 trillion in summer 2022.

https://www.pgpf.org/article/how-do-quantitative-easing-and-tightening-affect-the-federal-budget/

They didn't forget, they just want to blame anybody but their fat orange king so badly.