30 years treasuries yields spike

[Southernguy]

Is that good for housing, credit creation?
Why are 30 years mortgage rates going down?
Couldnīt paste the graph, which you get searching for "30 years treasuries yields chart".
Since the FED QE2 yields went from 3,87 to 4,13

[Starving Steve]

Re: 30 years treasuries yields spike

Is that good for housing, credit creation?
Why are 30 years mortgage rates going down?
Couldnīt paste the graph, which you get searching for "30 years treasuries yields chart".
Since the FED QE2 yields went from 3,87 to 4,13

With Bernanke already thinking of the next QE, why would anyone want to loan money to the U.S. Treasury for 30 years at a rate of yield that doesn't even cover the rate of inflation on food and energy costs? And then there are all of the unknowns ahead, for thirty long years. Imagine what 30 years of Bernanke and his tookis-lackers at the Fed would do to the dollar?

Even TIPS (savings bonds) might be a better bet than 30-year U.S. Treasuries @ 4.13%.

[jk]

Re: 30 years treasuries yields spike

Why are 30 years mortgage rates going down?

the 30 year mortgage rate is keyed off the 10year treasury rate. remember, first, that mortgages are self-amortizing. treasuries are not. further, most mortgages are not held for a 30 year term, but are paid off early for a variety of reasons, most commonly sale of the property or refi. thus the duration of a 30 year mortgage is not even close to that of a 30 year treasury.

[Prazak]

Re: 30 years treasuries yields spike

With QE2 focusing on buying Treasuries, rather than mortgage-backed rubbish, shouldn't mortgage rates logically have begun ticking upward?

[jk]

Re: 30 years treasuries yields spike

With QE2 focusing on buying Treasuries, rather than mortgage-backed rubbish, shouldn't mortgage rates logically have begun ticking upward?

no, the 10 year treasury rate is what drives 30 year mortgage rates. see my post [#3] above. the 10year is used by institutions to hedge mortgage exposure. add the fact that there is virtually NO PRIVATE MORTGAGE MARKET anymore, virtually all mortgages are now done through federally appropriated former-gse's and are gov't guaranteed.

[GRG55]

Re: 30 years treasuries yields spike

With QE2 focusing on buying Treasuries, rather than mortgage-backed rubbish, shouldn't mortgage rates logically have begun ticking upward?

The mortgage rate is the cost of a new mortgage, written under today's credit criteria and reflecting today's perceived asset values. It has nothing to do with the "value" of previously written "mortgage backed rubbish".