Markets & Economy

All should expect outsize economic volatility ahead — true upping and downing

Long-term rates have stabilized, but there could be rough waters in the future

Long-term rates have stabilized -- maybe a bit better than that. The 10-year T-note today breaking below 2.31 percent resistance, but mortgages are still above 4 percent. Rates have jumped a half-percent in 60 days and were due for a breather, but all should expect outsize volatility ahead -- true upping and downing. Since 2007, any discussion of “uncertainty” causing volatility described pathways back into the pit. Now the future is more uncertain, but it’s not a bad-news deal. The pit risk is lower, but the good-news potential is far higher. On net, greater volatility. Interest rates are driven by the bond market. That’s what it does. To those who play on that freeway, it doesn’t matter if they get hit by a rattletrap pickup or a brand-new Lexus. Hit is hit. That’s why interest rate commentary so often seems grim, even when the economic tilt is to the better. Here is the uncertainty list as of today. A collection of double-headers. Greece. Rates are better...