InternationalInvesting

How Brexit could affect the global economy (including U.S. housing)

Last week’s rate movements were unusually powered by individuals acting on principle
  • Oddsmakers in the United Kingdom have consistently posted very long odds for U.K. exit from the European Union.
  • The flip in polls to Leave upended financial markets.
  • Closer to home, Fed Chair Yellen acknowledged that forces holding down interest rates will be protracted.

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So, the interest rate for U.S. mortgage borrowers is determined by London bookies? So it is, and for one more week. And the result, briefly, rising now: U.S. 10-year T-note to 1.55 percent and mortgages near 3.50 percent, both five-year lows (note that overseas money prefers Treasurys to mortgage-backed securities, the yield spread widening). Rate movements, domestic and global, are usually driven by new economic data. Last week’s movements were unusually powered by individuals, and even more unusually, individuals acting on principle. Brexit: Leave or Remain Bookies first: Oddsmakers in the United Kingdom have consistently posted very long odds for U.K. exit from the European Union. Until early June, opinion polls had forecast a narrow victory for Remain, then suddenly flipped to a substantial lead for Leave. Polls there struggle as here in the age of cell phones to canvass representative slices of voters likely to vote -- long gone the reliable days of home landlin...