Friday, December 10, 2010

Mortgage Interest Rates Rising,0,1978719.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fmostviewed+(L.A.+Times+

This is not good for the economy but it is also a bad sign of future problems. Mortgage interest rates are keyed to the price that investors are willing to pay for long term treasury bonds. The Fed signaled an intention to purchase large amounts of long term treasuries to keep interest rates low. Investors may have reacted against this plan because they fear future inflation and even higher interest rates. That would make bonds that they purchase today less valuable.

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