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Interest Rates
News on interest rates has taken a back seat to continuing strains in the financial markets. The credit markets are still feeling for the bottom. Recent news of more bank losses and Fannie Mae/Freddie Mac bailouts leaves the entire financial realm weak-kneed. With the elections in two short months, and no clear leader in the polls, we likely won’t find economic confidence through the end of the year. Not too many would argue that we will muddle through the rest of 2008 with an eye toward 2009 where hope springs eternal.
Today’s 10-year Treasury is 3.79% versus 3.56% six months ago, an increase of 23 basis points. The 30-day LIBOR at 2.49% has decreased 22 basis points and Prime is also down 25 basis points. The uptick in long rates is a reaction to inflation concerns. The downtick in short rates is to bolster our economy. No surprises there and nothing pointing to big spikes.
Source: Peter W. Wong Associates / INTERVEST Newsletter, September 2008
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