Fixed-income Update! REAL 10Y Yield Climbs To Near 2%, Mortgage Rate Climbs To 7.62%, Home Purchase Mortgage Apps Decline To 1995 Levels, 2Y Treasury Yield Breaches 2%, UST 10Y-2Y Yield Curve Remains Inverted (Wasting Away Again In Bidenomicsville)

Confounded Interest ^ | 09/07/2023 | Anthony B. Sanders

[Kaiser8408a]

As the late crooner Jimmy Buffet sang, the US economy is wasting away in Bidenomicsville, looking for our lost economy for the middle class and low wage worker.

As Bidenomics fails to do anything other than make big donors wealthier (green energy companies, big tech and union bosses, etc), we are seeing the impacts of Fed monetary tightening to combat inflation caused by Biden/Pelosi/Schumer’s spending spree.

First, the 10-year REAL Treasury yield is close to breaching 2%.

Second, 30-year mortgage rates are now 7.62%, up over 150% under Bidenomics.

Third, mortgage purchase applications crashed to the lowest level since 1995.

Fourth, the 2-year Treasury yield just breached 5%.

Fifth, the 10Y-2Y yield curve remains deeply inverted.

[Kaiser8408a]

wasting away again Bidenville.

[thinden]

lost cred on USTN yields @ 2%

is this a chat bot written article?

[Pajamajan]

bttt

[SaveFerris]

[Bidenomicsville]

If they really only do a 3.3% increase on Social Security this year, after Biden’s 25%-50% increase in food costs, gasoline, heating oil............

The Disastrous Joe Biden Administration.

Thanks, Democrats. Thanks a lot.

[Migraine]

REAL yields calculate what you’re getting for your money after you figure inflation into the equation. 2% hardly seems worth it. There have to be better ways to wipe than w/ bonds.

[CA_soon_gone]

I did a double take on that too. They stated REAL rates, which I guess is yield minus inflation. So 5% yield minus ?? = 2%. They think inflation is 3%. I’m still out too.

[KevinB]

Build Back Better

[thinden]

I did a double take on that too. They stated REAL rates, which I guess is yield minus inflation. So 5% yield minus ?? = 2%. They think inflation is 3%. I’m still out too.

xxxxxxxxxxxxxxxx

nobody in the real world uses REAL interest rates like this. (well maybe a gummit economist or MSM news reader?)

as bubba would say: "it depends on what your definition of REAL is?"

if they used cc rates vs USTN, then REAL rates would look like this:

28% APR card rate
<11%> inflation rate
17% REAL interest rates

[NautiNurse]

LOL. Using your logic, 7.74% mortgage rates are really -3.26%. The mortgage company would be paying for the privilege of loaning money to buy the new home.

[politicket]

Have had short-term assets in 4-week US treasuries since the yield inversion.

4-week rates just broke 5.5% today.

Loving the return on the most pristine and safe investment one can make - although the banks hate me with a passion that I won't give them my money - and I have done everything possible to contribute to their devastating outflow that will bring many of them down.

[politicket]

The banks are also rueing the day they ever refinanced my two properties at 2 1/8% and 2 1/4% for 15-year. Rates have now tripled past that.

They can go pound sand.

I used to make sizable extra payments on our mortgages - not anymore.

I take that money and invest in 4-week T-bills returning 5.5%

After mortgage interest each month - I'm still getting a profit that's slightly more than the mortgage interest...coming from the yield on the treasuries.

I will slow-crawl the mortgage loans as long as possible, at least while short-term treasury yields are higher than my mortgage rates.

[Mouton]

Same here except with my C Union. I noted to the rep there when inquiring about CDs, they were almost 3% below the T bond rates for the same time period. That was about 18 months ago. So, today I am viewing some maturing bonds which have done quite well. Since I bought them with low coupons at a discount, I did not have to pay tax along the way either.