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Strategies & Market Trends : Real Estate home/investment
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To: David Jones who wrote (1)9/14/1998 12:48:00 PM
From: David Jones  Read Replies (1) of 73
 
9/10/98 Look For Further Downward Movement In Mortgage Rates

Investor uncertainty regarding stocks and the Clinton Administration continued to drive investors into the safety of Treasury securities. Interest rates moved substantially lower as a result, which should lead to additional reductions in mortgage rates.

Trouble in Latin American financial markets is the latest foreign event to aggravate investor concerns of shrinking corporate profits and the future health of the U.S. economy. As if this wasn't enough for investors to worry about, speculation is heightening regarding a possible impeachment of President Bill Clinton.

This combination of events has investors once again scrambling for the safety and stability of U.S. Treasury securities. With Greenspan now expected to lower short-term rates by year's end, investors had few reservations about putting their money into Treasuries. The value of Treasuries surged as a result, putting substantial downward pressure on long-term interest rates.

At 4:00 PM EST:

The price on the 30 year Treasury Bond was higher by one full point and 14/32, pushing its yield to investors down to 5.17%.

The price on the 10 year Treasury Note was higher by one full point and 2/32, pushing its yield to investors down to 4.75%.

This downward pressure if maintained, will surely lead to additional mortgage rate reductions by week's end. Since Friday is not likely to produce any events to ease current concerns regarding overseas economies and Clinton's Administration, investment in Treasuries should remain active and promote some downward movement for mortgage rates.

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