For the past 2 weeks, 10-Year Treasury rates were down 45bp. Past week: down 22bp.
Red line represents the most current rates, while the green line represents rates from one week ago.
Longer-term rates decreased relative to shorter-term rates; as a result, the inverted yield curve is less steep. For terms of 5+ years, the Yield Curve is positive. One-month rates were up 1bp.
The spread between the 30-year mortgage rate and the 10-year US Treasury rate continues to hover near an all-time high. Mortgage rates experience fluctuations, surging upward and subsequently easing. To narrow this spread, either Treasury rates must rise or Mortgage Rates must fall. Considering the Federal Reserve’s current stance at 1213.23, it appears that Treasury rates are likely to decrease in the future, with Mortgage rates following suit. The potential impact of the Fed’s reduction in its Treasury and MBS holdings remains to be seen.
Bill Knudson, Research Analyst LANDCO ARESC