Interest rates have continued to fall, and have stabilized around this current 3.21% range — which is also the “technical” number.
The continuing market mover is the European situation; and although confidence returns that Greece will stabilize its situation (as well as other currently-distresses nations) the investor sentiment still prevails with concern that the allowed bailout will not be enough to contain what weakness may be coming as a result of all of this. So, in the end, money has flowed from Europe to the US, for what is perceived to be “safer haven” investment in US bonds. This will probably continue for some time.
Domestically, housing numbers are up; but this is very largely because of Federal Stimulus money directed toward this area. It will be indicative to see where this goes after the stimulus is gone — which traditionally, by the way, can also have a negative effect on the numbers as such stimulus serves to pull people out of the market ahead of when they were ready — effectively creating a mini-slump afterward. We shall see.
Meanwhile, inflation numbers are low; and the Fed announced today that it will not sell off it’s purchased mortgage-backed securities until after interest rates begin to rise. This will work to to not add selling pressure to the current market. And who knows, perhaps it’s because the Fed wants to help the economy; and perhaps because the value of these things is suppressed to the Fed, until after rates rise.
