Saturday, August 16, 2003

After a brief pause, long-term interest rates keep going up. On Wednesday the 10-year treasury bond hit 4.58% and maintained that height into Thursday at 4.55%. Rates seemed to be coming down two weeks ago, dipping from 4.40% the week ending August 1, to 4.43% the week ending August 8. Now they continue their northward hike.

Back on August 3 the General reported that many economists think the 10-yr. at 5% is the tipping point, when interest rates become "high" and start cutting into demand and thus the economic "recovery" or whatever it is the US is experiencing. Since then the 10-yr. is up another 11 basis points. And with inflation so low, real interest rates will have a much easier time floating up and up.

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