An article by Daniel Kruger, columnist for Bloomberg.com, points out that owning U.S. government debt is as great as any time since the 1950’s. The a survey of 70 economist and strategist by Bloomberg News shows a consensus estimate calling for the yield on the 10-year note to rise to 3.8% by year-end. If those projections prove reasonably accurate, investors in the 10-year security would lose 4.63%. That is certainly not the “stuff” that makes for well bid auctions of 10-year notes and 30-year bonds.
The “so what” factor here is straightforward. If demand proves lackluster for one or any combination of this week’s three debt offering from Uncle Sam – look for mortgage investors to quickly become stingier than normal with their money – a condition almost sure to increase the upward pressure on mortgage interest rates.
Each of these week’s three auctions will conclude at 1:00 p.m. ET – and I’ll post the results on my website as soon as possible once the final gavel falls.
THE MARKET IS ALWAYS RIGHT! … YOU AND I ARE SOME OF THE TIME
