Mortgage rates stayed at their 2005 highs, just below 6.5 percent for the lowest-fee 30-year loans, but trading in the all-important Treasury bond market suggests that long-term rates may be nearing a top. There were no market-moving economic data last week, but the Treasury had $44 billion in new bonds to sell at auction and the behavior of the bidders tells a tale. The Treasury borrows constantly to roll over old debt and to raise new cash, but it raises the big money in a few "refunding" weeks. Nobody gets a refund in this misnomer; the ancient term refers to the Treasury re-funding its empty coffers. New cash comes from selling new IOUs. The Treasury wants to get the best price possible when selling, and so conducts auctions; the winning bidders get the lowest interest rate from th...
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