Interest Rates

10-year-yields-and-30-year-fixed-since-2008[1]  The graph at left shows how the interest rate on the benchmark 10 year has changed from January 2008 till today.

Note that the 30-year fixed rate mortgage tracks this almost perfectly because banks us the rate in the 10-year treasury bond to set the rate on fixed rate mortgages.

The rise in rates in the last year was triggered by the Federal Reserve’s hints that it would stop “easing” at some time in the future.  The recent announcement that it would not stop easing yet has caused the 10-year bond yield to decline from nearly 3% to about 2.65%.

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