I’ve not posted in a couple of days as I’ve been in the middle of a major project. In the shortest of versions, rates have been strongly coming down as the news out of Europe remains the same: the world community is concerned that this “bailout” is not going to be enough, and that things will spread. Markets don’t like uncertainty. And that will breed fear, and a move to perceived “safer vehicles.”
On the US news front, expectations at this point are that the growing economy will slow by second half. We’re anything but out of the woods. In fact, the inflation number came in low; and for the first time, investors are moving to long term bonds, on the expectation that monetary policy will have the Fed keep rates low for an extended time, on this low inflation news.
How long will this trend last? Probably as long as the concerns in Europe last — which is to say, expect down rates for some time.
