InvestingMarkets & Economy

Did the election really affect rates — and when will it stop?

The two obvious questions: Did Trump’s election do this? And how far does it have to run?
  • The signals and economic effects are all in bonds, which have been rising this week.
  • Trump’s election was a catalyst for a tectonic move already underway.

Consider the wreck in the bond market. Ignore stocks. In this circumstance they have neither predictive nor economic power. The signals and economic effects are all in bonds. On the morning of Election Day, the 10-year T-note traded 1.83 percent. The day after: it opened at 1.95 percent and closed the day at 2.07 percent. Thursday: 2.15 percent, the highest since January. Today, a holiday. Thank heavens. Mortgages have barely held 4.00 percent. The two obvious questions: Did Trump’s election really do this? And how far does it have to run? Quick answer to the latter: In the “Taper Tantrum” after Bernanke announced the end to QE quantitative easing), the 10-year ran from 1.60 percent to 3.00 percent in a straight line. An upward move in long-term rates began this June, after the 10-year’s 1.37 percent revisit to the all-time low. The move up has been gradual, but steepening. Everyone saw the bearish signs, but with little inflation, a non-accelerating economy, the Fe...