AgentIndustry News

Weak job gains impact real estate rates

But inflation looms on horizon
Published on Dec 3, 2004

Saved...saved, we were, first thing this morning. Mortgage rates this week began their inevitable rise through 6 percent, pushed by T-bonds 4.43 percent, headed for 4.6 percent-plus...then at 8:30 EDT, flashing on traders' screens worldwide, "NOVEMBER PAYROLLS GAIN 112,000, ONE-HALF FORECAST, OCTOBER REVISED DOWN." Traders holding enormous short bond positions were instantly de-pantsed, and the whole long end of the yield curve came down .2 percent or more as the shorts had to buy to cover their collectively exposed derrieres. Low-fee mortgages are back down to 5.75 percent, which Freddie Mac's survey will not discover until next Thursday. Today's rate improvement feels like a temporary reprieve, not true salvation. For three years running I have been a skeptic on the strength and sustainability of economic expansion, but I think the odds now favor rather more strength and inflation risk, and higher interest rates at all maturities. "Inevitable" is a big word to use, up in that se...

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