InternationalInvesting

Good news will push rates up slightly — and what’s next?

What the international banking scene means for interest rates in the U.S.

Long-term interest rates rose this week, pushed by two forces: first -- ick -- some good economic news, the bane of all in the bond market, and second by policy change underway at the ECB (European Central Bank) and BOJ (Bank of Japan). The definitive 10-year T-note has reached a ticklish spot, 1.85 percent, low-fee mortgages just above 3.50 percent. If 10s break above 1.90 percent, the next stop is 2.25 percent and mortgages about 4.00 percent. The good news Good news pushes rates up for fear of inflation and Fed tightening. The “good” this week is thin (hence my belief in the role of foreign central banks, addressed below), but good is here: third-quarter US GDP (gross domestic product) jumping 2.9 percent is splattered all over web headlines this morning, but wildly exaggerated. If we strip out all the weird parts of a massive report -- a big build of inventories, soybean exports (!), shaky housing, healthy business spending but the weakest by consumers in a year -- t...