Those that know me know I am a roll with the punches, always keep a positive attitude, silver linings guy. I know markets will change and I advise my clients with common sense and experience.
Pardon me, but I am freaking out just a little at the moment. Two days ago our regional paper asked me to write an article about where interest rates were going. I responded with a well reasoned analysis of the surprise enthusiasm after the election, a leveling off and then a steady increase through the new year. I expected bonds would recover and stay in the 99.5 to 100.00 range.
This morning this happened:
We have gone from the peak of 104.25 on Sept 28th to 102.97 on election day, to 98.75 this morning. To lose 550 basis points in such a short time frame could not have been foreseen. Quite frankly this is a bigger shock than the election results.
I understand the consumer confidence and exuberant expectations of what the Trump presidency could mean in the short term, but once again Americans are overreacting. If this continues we are going to see 30 year fixed rates go from the mid-3s to the high 4% range. 5% is in sight and I did not think that would happen until 2018.
Please tell me we will come to our senses soon!
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