Treasury 10-year notes fell the most in six weeks as investors speculated inflation will accelerate after the Federal Reserve cut interest rates by a half-percentage point.

The difference between two- and 10-year Treasury yields rose to 55 basis points, the widest spread in four weeks. The Fed yesterday reduced its target interest rate to 4.75 percent, saying in its statement that it ``will act as needed to foster price stability'' and sustainable growth.

Core consumer prices, which exclude food and energy, climbed 0.2 percent last month as economists forecast and were up 2.1 percent from a year earlier, the Labor Department reported today in Washington.

Builders in the U.S. began work on the fewest homes in 12 years in August, raising the risk the real-estate recession will spread to other parts of the economy.

So much for the Fed lowering overnight lending to see better interest rates!

:-(

 
Posted by Kris Krajecki Mortgage Broker Huntley, IL on 09/19/2007 10:26 AM   Comments (4)   ,  

4 Comments on Treasury 10-Year Note Falls the Most in Six Weeks on Inflation

it's a simple lesson. a fed cut doesn't necessarily mean lower mortgage rates. do you think they were so scared that the market had already built in the .25 to.5 cut that if they didn't do anything the mortgage market would have exploded? kind of forced to lower the rates by the market itself.

09/19/2007 10:34 AM by Jay Beckingham (Allied Home Mortgage Capital Corp.)

well stated Jay -   now write us all a book on how to explain this to clients looking for much improved rates today over yesterday ---   NOT

09/19/2007 10:36 AM by Lewis Poretz - Open Mortgage - Maryland FHA expert

The yield on the 10 year is up 22/32 as of right now. I will be expecting an intraday increased pricing/rate change on all of the A paper 20/25/30 year fixed rate mortgages.

 

09/19/2007 10:39 AM by Steve Jones (California Best Reverse Mortgages)

EXACTLY!!

All of my borrowers...past and present...are thinking that the rates have DROPPED. Goes to show how much the media influences the general public and how "ignorant" the general public is. If the FED wants to help, then perhaps they should explain exactly what is going on and the definition of Prime Rate.

Economics 101 should be on every channel during the week from 7pm - 8pm!

09/19/2007 10:44 AM by Kris Krajecki - American Mortgage Werks - Huntley, IL

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Mortgage Company: Kris Krajecki - American Mortgage Werks - Huntley, IL
Kris Krajecki Mortgage Broker Huntley, IL
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