You are currently viewing Market Snapshot 8.17.23- Bonds Remain Under Pressure

Market Snapshot 8.17.23- Bonds Remain Under Pressure

Good Thursday AM,

Not much data today and not that it would matter much. Bonds remain under pressure.

I am trying to better understand why. The economy is cooling and even if not, it is certainly not growing. The Fed will have limited reason to raise rates again. As a matter of fact, futures contracts don’t show any higher probability of another Fed rate hike than where they were last week or last month. I will share more on it when the lightbulb goes on (that could be a bit with me).

In lieu of sharing some great revelation, I am sharing a few snippets from around…

Bond Yield Hits Highest Since 2008, Adding Pressure to Borrowing Costs

The yield on the 10-year U.S. Treasury note hit a 15-year high, threatening steeper costs for many borrowers and raising concern on Wall Street about the potential fallout in the stock, bond and housing markets. A key benchmark for interest rates across the economy, the 10-year yield settled at 4.258%, according to Tradeweb. That marked its highest close since June 2008, months before the collapse of Lehman Brothers and expansive Federal Reserve policy ushered in more than a decade of historically low bond yields, Sam Goldfarb reports.

Some Fed Officials Are Turning Cautious About Raising Rates Too High

Most Federal Reserve officials backed an increase in interest rates last month but some saw rising risks that they might raise rates too high, underscoring growing caution about further increases. Minutes of the July policy meeting, released Wednesday, said some officials thought the risks of raising rates too much versus too little “had become more two-sided, and it was important that the committee’s decisions balance the risk of an inadvertent overtightening of policy against the cost of an insufficient tightening,”. The Fed’s next policy meeting is Sept. 19-20.

What 7% Mortgage Rates Mean for Home Buyers

The math on buying a home has grown even more depressing. The average rate on the standard 30-year fixed mortgage rose to 6.96%, according to mortgage-finance giant Freddie Mac. Further frustrating buyers is the expectation rates could remain elevated for some time.

Please remain safe and stay healthy, make today great!