Chips down, Fed plays waiting game

Flickr image by Jam Adams.

The August slide in long-term rates found bottom this week, with the 10-year T-note briefly to 3.28 percent (3.37 percent today), and lowest-fee mortgages to 5.25 percent.

The last time it was so low was during a single week in early July, the best since a general rise began in early May. To break through these levels would require a sharp thump in the stock market or newly weak economic data; pushing the other way is constant Treasury borrowing and a great deal of refinance demand just above 5 percent.

The most mighty gorilla of all data, first-Friday payroll data for the prior month, arrived today right on forecast: 216,000 jobs lost in August, and 49,000 more shaved from summer estimates.

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