Mortgages are close to 5.5 percent today for the lowest-fee deals – as low as at any time since March '04. The ultimate driver, the 10-year-T-note, has stayed within a 4.16 percent-4.3 percent range for a month. This stability in long-term rates – if anything tilting to the down side – is contrary to just about every forecast, whether published or talking-head. The yammering has gone like this: the Fed is marching toward 3.5 percent-4 percent or more from today's 2.25 percent; and the dollar is sure to weaken further, which will cause both inflation and a demand for higher yields by foreign investors. All clear, but the actual market has not played by the rules: save one week after Thanksgiving, the 10-year has not traded above 4.35 percent since last July. Why are bonds ...
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