Posted To: Mortgage Rate Watch
No, this isn’t one of those click-bait headlines that promise to share “one weird trick” or proclaim “you’ll never believe what happened next.” Well, actually, some people might have a hard time believing this one. In the interest of respecting the time of those who are already up to speed on this week’s economic data and interest rate movements, we’re about to talk about the paradoxical drop in rates despite decades-high inflation. Everyone else, read on! Inflation is one of the mortal enemies of interest rates. Here’s why: Rates are determined by the amount of money investors are willing to pay for bonds/loans. Basically, investors give you a big chunk of cash and you make payments (with interest) over time. Inflation makes dollars less valuable (or, said another way, it makes “stuff” cost…(read more)
Source: Mortgage News Daily
