Interest Rates Up Again… a Lot!

June 26th, 2013

Interest rates are now up about 1% from their rock bottom lows of a few months ago. The inevitable interest rate increase from all-time lows is continuing. Investors have continued to sell stocks and bonds following the Federal Reserve meeting last week. It seems that if the economy performs as expected, then the Fed plans to taper its bond purchases later this year. Over the past few years, the Federal Reserve bond purchase program has helped mortgage rates decline to historically low levels. This occurrence has lifted the stock market. So any sign of the withdrawal of stimulus has hurt both stocks and bonds. Read the rest of this entry »

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The Latest On The Bond Market

December 18th, 2012

Below is a copy of some data I received from a bond market data service I use. It reports on bond market news several times daily. It helps me get a gauge on which way interest rates may go for the day and in general. I wanted to paste a recent email they sent me, and in parentheses and in CAPS give you my interpretation. Below is the data with my comments. Read the rest of this entry »

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Federal Reserve Has No Control

October 5th, 2009

 

When it comes to interest rates, the Federal Reserve is fairly irrelevant. All it does is adjust its rates to those set by the market. If you plot the yield on T-bills against the discount rate, you will see that the former leads the latter. Despite all the rhetoric about it, the Fed has not kept rates artificially low, just as it did not make them soar in the 1970s. The market sets the rates, and the Fed follows. Read the rest of this entry »

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