[Miss Marple]

Why are the interest rates low?

[RegulatorCountry]

"Why are the interest rates low?"

Heavy foreign buying of treasuries has depressed long yields, which in turn is depressing mortgage rates.

[RedBloodedAmerican]

Don't ask. You'll get 3 paragraphs of personal attacks telling you you're foolish, one paragraph telling you not to make personal attacks and another saying the President should not get credit for anything.

I get my info from home builders and realtors I contract to, and silly websites like the nahb.org, realtor.com and the White House press site. I know, stupid of me to read these things the last few years.

[Dont_Tread_On_Me_888]

Short or long-term? Also, compared to what era? Rates have risen in recent weeks, but compared to some past times, still considered low.

Inflation has not been a problem, so one would think the Fed should not be raising short-term rates. The Fed has been raising short-term rates and the futures market indicates they will raise rates more. They are trying to fight inflation that has not appeared yet, but they are trying to stay ahead of the curve.

Wage inflation is a concern. Full employment (which we have--4.8% unemployment is considered full employment) does put pressure on wages. Commodity prices are a mixed bag.

The market, not the Fed, dictates longer-term rates. Longer-term rates have indicated that the smart money believes the economy will not overheat, and that any "boom" will not have much legs, or it indicates the Fed will fight inflation (and keep the economy from overheating), since the yield curve was inverted, i.e., long-term rates lower than short-term rates.

The point I tried to make to this member is it is a false association to make last month's housing numbers with the president, crediting President Bush. I pointed out if you do that, then you must blame him for the bad retail sales number.

Both positions are ridiculous, of course, as POTUS can't control short-term economic indicators, and it is as wrong to blame Bush for today's interest rate rise just as it is wrong to credit him the reason for that interest rate rise today, the housing numbers.