Economic Conversation

Current home mortgage rates are set to move higher as interest rates have moved up early this week.  The 10 year treasury rate yield moved higher all of last week and it looks like this week is no different.  There is expected to be some consolidation and the yield moved up over 10% last week.  If we see a big move again this week, 6% mortgage rates could happen soon than we hoped.  The Federal Reserve Bank will attempt to push these rates back down, but it may not happen.

Since March, Ben Bernanke and the Federal Reserve Bank has done everything they can to push average mortgage rates lower.  To help Americans get the best fixed rate mortgage possible, the Fed has bought up as much United States debt as they possibly could.  The problem that could occur in the very near future is that by printing money to buy up US debt, we are almost certain to see a strong inflationary period.  If inflation hits, you can bet mortgage rates are going to sky rocket.

While it might be a few years off, inflation is a scary thought for the current economic situation.  Home prices continue to plummet each month and higher mortgage interest rates will just accelerate the decline in prices.  In January, the 10 year treasury rate yield started to move higher which is an initial sign that mortgage rates are going to move up.  If the uptrend in the 10 year yield continues, 6% mortgage rates will be here very soon.