Long-term rates fell last week — only about one-eighth of 1 percent, but when the world is so close to zero or below it, any drop seems big. The 10-year T-note settled just under 1.75 percent, and low-fee mortgages near 3.75 percent. The cause, again: trouble overseas.
- When global risk rises, money flows to the yen.
- For the first time since the Federal Reserve began to release its meeting minutes a dozen years ago, this most recent set is dominated by concern for the outside world.
- A quick scan overseas: Europe is either in or close to real deflation, resistant to the ECB’s massive bond-buying. Same in Japan but worse, negative rates causing more panic than help in its demographic implosion. China is of course the whale, its internal tinkering unsustainable but keeping the show going for now.