Bad Santa! 10Y Treasury Yields Jump Above 1.60% as Expectation Of Fed Hikes Grows (Mortgage Rates Expected To Rise)

Confounded Interest ^ | 1/3/2022 | Anthony B. Sanders

[Browns Ultra Fan]

Happy New Year! And Treasuries are off to fast start with investors bailing on Treasuries and buying stocks. AND the expectation that The Fed will raise rates 3 times this year.

The 10-year Treasury Note yield rose above 1.60% this morning.

And the US Treasury 10Y-2Y curve rose to 80.601 basis points.

Fed Funds Futures data is showing 3 rates hikes in 2022. May, September and December.

The Fed Dots project is definitely showing an upward trend in the Fed Funds Target rate with FOMC member forecasting the median target rate to be above 2% by 2024.

Of course, Fed reverse repo activity grew to an all-time high (but it is expected to pare-back).

How about mortgage rates? I expect mortgages rates to rise over 2022 as the 10-year Treasury Note rises.

While The Fed has been acting like Santa Claus with monetary easing since 2008, they are predicted to act like Bad Santas in 2022.

6 months of telling inflation in transitory stories. Now you know why.

What do you say to the Fed Open Market Committee that has resisted raising rates while inflation is the highest in 40 years?

[Browns Ultra Fan]

Fed will likely raise rates three times in 2022. Speeding up retirements and rising interest rates could nail the housing market.

[CatOwner]

There goes our bond investments.

[millenial4freedom]

I hate to see people lose money on their investments/be underwater, but the housing market needs to be 'nailed' desperately.
A 30%+ appreciation in a bit over a year is just plain bonkers, even with the (slight) reduction in interest rates that we saw from 2020-21.

[dragnet2]

I tend to agree, but the ugly fact is most of the prime real-estate is spoken for, owned, built on, and they’re not making any more of it. Places where most people want to go, are already full of people...Prime RE in desirable areas are all taken up and there is no more of it. No supply and LOTS of demand.

[protoconservative]

They certainly are turning range land into housing developments in colorado and wyoming at record rates. See you cannot develop land unless liberals want it fleeing California, because environmental law is for conservatives and/or the agricultural class.

[CTyank]

Yup. Downsized in late 2019, paid off autos and other debt with the sale of the previous home.

Paid approx. 230k for the new home,and Zillow(not 100% reliable) now has us at over 300k.

[dragnet2]

Wind swept range land is not prime RE.

[Ceebass]

While The Fed has been acting like Santa Claus with monetary easing since 2008,....

Didn’t they raise rates several times after Trump got elected in 2016.

[econjack]

Don’t buy yet, as interest rates will continue to rise, depressing bond prices.

[politicket]

I believe it all to be hot air. Don’t believe they’ll raise rates even a single time this year.

[Sacajaweau]

Great...that’ll kill the housing market even more.

[woodbutcher1963]

That worked out well just recently in Colorado.

971 structures burned to the ground in a brush fire.

[voicereason]

but the housing market needs to be 'nailed' desperately.

It isn't just the housing market that's inflated, the stock market makes housing look like an amateur.