Interest Rates Archive

Whither QE?

Mtg rates are up by over a full 1%, because the Fed may scale back on QE. But it hasn’t scaled back yet. But rates are way higher anyway. So the question is, does QE per se keep down rates? Or does it just about signals? So when this last round of ...Read More

Mtg apps down a bunch more

Graph looks like it fell off a cliff. Who would’ve thought… U.S. Mortgage Applications Down September 11 — The number of mortgage applications filed in the U.S. last week fell 13.5% from the prior week on a seasonally adjusted basis as interest rates increased, the Mortgage Bankers Association said Wednesday. On an ...Read More

brazil hikes rates to fight inflation

Fundamentally this increases govt deficit spending/interest income for the private sector, a negative for the currency and inflation, especially as it adds to costs. However it also adds to spending/output/employment which causes policy makers to think they got it right by hiking as the stronger economy ‘needs’ the higher rates, etc. Brazil ...Read More

purch apps and related comments

Full size image This shows what’s happened to the number of home mortgage purchase applications since rates went up (they’ve gone down!). While higher rates help savers as much as they hurt borrowers, the borrowing at the higher rates has to take place for the savers to get helped. Yes, Tsy auction ...Read More

Fed minutes, comments on full text

Comments in below and highlights mine: Developments in Financial Markets and the Federal Reserve’s Balance Sheet The Manager of the System Open Market Account reported on developments in domestic and foreign financial markets as well as the System open market operations during the period since the Federal Open Market Committee (FOMC) met ...Read More

Michigan survey and a small rant

Funny how sentiment follows stocks… And how housing has gone flat all year is dismissed. Not to forget jobless claims are about people losing their jobs and not about anyone getting a job. Yes, claims have correlated to new jobs, but that’s a different matter. For example, ‘at the limit’, you could ...Read More


Karim writes: Something for everyone (even uses on the other hand in his remarks); base case remains in place for tapering in September. First mention Ive seen on nature of rate hike cycle: will be gradual. Seems to be looking past the first hike! Sequencing in these paragraphs is telling. Base case ...Read More

mtg purchase apps down

It still all looks to me like it would look if demand was decelerating from the tax hikes and sequesters, and if QE was in fact a tax. Mortgage Applications Drop as Interest Rates Surge June 5 (Reuters) — Interest rates on U.S. mortgages continued to surge last week, rising above four ...Read More

Tokyo Urged to Undertake Serious Fiscal Reforms

More of: “In the land of the blind the one eyed man gets his good eye poked out…” Operationally, the BOJ, monopoly supplier of yen reserves, can peg long rates just as easily as short rates. If they back off on fiscal they’re right back where they started from, as QE is ...Read More

Low FF rate and down shift of Labor Particpation

Maybe they are beginning to confirm my ‘suspicion’ the mainstream has the rate thing backwards? Not that I agree with all their reasons, of course! Subject: For The Economist in Us – Low FF rate and down shift of Labor Particpation A short and interesting piece can be found on the St ...Read More