I am very versed in how markets work, I have been managing money over 20 years. I don't disagree with you that rates have backed up with some inflation numbers coming in hotter than expected. I just see that changing and I will agree to disagree with you.
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Mortgage Rates (4 Viewers)
- Thread starter MechEng
- Start date
Stoneworker
Footballguy
Go find any current yield curve. Look at the rate 10 yrs and 8 months from now. It's approx 4.6%. That's a proxy for what investors currently expect the 10-yr to be yielding at the end of the year absent any new information. 3.5% is dead wrong and therefore simply represents one random individual's prediction with no backup provided whatsoever. But thanks for the conversation.
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That's the beauty of the market, everyone can have an opinion. I'll assume you believe the 10 year will end the year at 4.60%. We can revisit this at year end. Have a great day!Go find any current yield curve. Look at the rate 10 yrs and 8 months from now. It's approx 4.6%. That's a proxy for what investors currently expect the 10-yr to be yielding at the end of the year absent any new information. 3.5% is dead wrong. But thanks for the conversation.
Stoneworker
Footballguy
No, that's not what I assume. That's what the market currently believes.That's the beauty of the market, everyone can have an opinion. I'll assume you believe the 10 year will end the year at 4.60%. We can revisit this at year end. Have a great day!Go find any current yield curve. Look at the rate 10 yrs and 8 months from now. It's approx 4.6%. That's a proxy for what investors currently expect the 10-yr to be yielding at the end of the year absent any new information. 3.5% is dead wrong. But thanks for the conversation.
I asked you to provide tangible backup for why your random personal opinion of 3.5% was different than the market and consensus economists' forecasts, hoping to gain some insight. You had none.
So it turned out to be a waste of time.
The base case for UBS is that the 10 year will end at 3.50%. That could change but that is where it is today.No, that's not what I assume. That's what the market currently believes.That's the beauty of the market, everyone can have an opinion. I'll assume you believe the 10 year will end the year at 4.60%. We can revisit this at year end. Have a great day!Go find any current yield curve. Look at the rate 10 yrs and 8 months from now. It's approx 4.6%. That's a proxy for what investors currently expect the 10-yr to be yielding at the end of the year absent any new information. 3.5% is dead wrong. But thanks for the conversation.
I asked you to provide tangible backup for why your random personal opinion of 3.5% was different than the market and consensus economists' forecasts, hoping to gain some insight. You had none.
So it turned out to be a waste of time.
Go ahead and post where you think it will end up since you are the expert.
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Go find any current yield curve. Look at the rate 10 yrs and 8 months from now. It's approx 4.6%. That's a proxy for what investors currently expect the 10-yr to be yielding at the end of the year absent any new information. 3.5% is dead wrong and therefore simply represents one random individual's prediction with no backup provided whatsoever. But thanks for the conversation.
This is a friendly discussion. Disagree and have a discussion and state your case for what you believe. But dial the dead wrong shtick way back. Thanks.
UBS came out this morning and increased their year end forecast of the 10 year Treasury from 3.50% to 3.75%. This is based on the recent stickyness of inflation data and they now predict 50 basis points in reduction this year of fed funds rate starting in September. Like I said before, expectations may change based on new data.
Stoneworker
Footballguy
On April 12, 2023, the 10-yr Treasury yield was 3.45%.
On the same day, UBS published a note forecasting the 10-year Treasury would fall even further from that point...and end 2023 at 3.25%
In actuality, the 10yr Treasury ended 2023 right at 4%...and of course is currently at 4.5%+
Looks like rates didn't fall as predicted by UBS in April 2023 and in fact they rose significantly. Best of luck in April 2024
"...we continue to think the 10-year will end [2023] near 3.25%"
www.ubs.com
On the same day, UBS published a note forecasting the 10-year Treasury would fall even further from that point...and end 2023 at 3.25%
In actuality, the 10yr Treasury ended 2023 right at 4%...and of course is currently at 4.5%+
Looks like rates didn't fall as predicted by UBS in April 2023 and in fact they rose significantly. Best of luck in April 2024
"...we continue to think the 10-year will end [2023] near 3.25%"
Fixed income: Carry conscious
While the UBS Chief Investment Office (CIO) maintains the overall up-in-quality bias within their portfolio, they do not believe rates will move materially lower, given the easing priced in and rising recession expectations over the near term, to mitigate the loss in yields between loans and IG...
www.ubs.com
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Stoneworker
Footballguy
UBS is kind of like the weather...if you don't like today's forecast...just wait a few days and it'll change.
...UBS now sees a growing possibility that inflation fails to decline to the Fed’s target, spurring a pivot back to hikes and sparking a deep selloff in bonds and stocks.
“If the expansion remains resilient and inflation gets stuck at 2.5% or higher, there would be real risk the FOMC resumes raising rates again by early next year, reaching 6.5% Fed Funds by mid-next year,” said UBS strategists
UBS has already tempered an aggressive view for 275 basis points of US cuts this year, to now forecast just 50 basis points.
Source: Fed Hiking to 6.5% is "Real Risk" for UBS Strategists - 4/16/24 Bloomberg/Yahoo Finance
...UBS now sees a growing possibility that inflation fails to decline to the Fed’s target, spurring a pivot back to hikes and sparking a deep selloff in bonds and stocks.
“If the expansion remains resilient and inflation gets stuck at 2.5% or higher, there would be real risk the FOMC resumes raising rates again by early next year, reaching 6.5% Fed Funds by mid-next year,” said UBS strategists
UBS has already tempered an aggressive view for 275 basis points of US cuts this year, to now forecast just 50 basis points.
Source: Fed Hiking to 6.5% is "Real Risk" for UBS Strategists - 4/16/24 Bloomberg/Yahoo Finance
Stoneworker
Footballguy
For technical analysis enthusiasts...
Additionally, the daily chart for the 10-year Treasury yield shows the 50-day and 200-day moving averages have created a “golden cross” pattern, signaling the confirmation of an uptrend and the possibility of further increases, with the next resistance level now projected at 5%.
Additionally, the daily chart for the 10-year Treasury yield shows the 50-day and 200-day moving averages have created a “golden cross” pattern, signaling the confirmation of an uptrend and the possibility of further increases, with the next resistance level now projected at 5%.
That article is stating what would happen in a worst case scenario, one that they view as a not very likely scenario. UBS base view is still for the 10 year to be at 3.85% at year end and that bonds are attractively valued right now. They have not wavered on that.
I noticed you still have not made your prediction on where the 10 year rate is at year end. I wonder why that is?
Stoneworker
Footballguy
The average rate on the standard 30-year fixed mortgage jumped by nearly a quarter percentage point to 7.1%, according to a survey of lenders released Thursday by mortgage-finance giant Freddie Mac. That is the highest level since late 2023 and the largest weekly increase in nearly a year.
Existing home sales in March, meanwhile, posted their biggest monthly drop in more than a year, the National Association of Realtors said Thursday. The 4.3% decrease from February was the largest percentage decline on a monthly basis since November 2022, NAR said.
A persistently low supply of homes for sale is also pushing prices higher. The national median existing-home price rose 4.8% in March from a year earlier to $393,500, NAR said.
The costs of buying a home are also outpacing the increases in rent, making it relatively cheaper to rent. The average monthly new mortgage payment was 38% higher in the U.S. than the average apartment rent at the end of 2023...that premium has been in the double digits for two years.
Source: 4/18/24 WSJ
Existing home sales in March, meanwhile, posted their biggest monthly drop in more than a year, the National Association of Realtors said Thursday. The 4.3% decrease from February was the largest percentage decline on a monthly basis since November 2022, NAR said.
A persistently low supply of homes for sale is also pushing prices higher. The national median existing-home price rose 4.8% in March from a year earlier to $393,500, NAR said.
The costs of buying a home are also outpacing the increases in rent, making it relatively cheaper to rent. The average monthly new mortgage payment was 38% higher in the U.S. than the average apartment rent at the end of 2023...that premium has been in the double digits for two years.
Source: 4/18/24 WSJ
