Refinance Rates Following the 10 Year Treasury Rate Yield

Posted on | July 15, 2009 | No Comments

Refinance rates look to be following the 10 year treasury rate yield which has me completely baffled at this point.  Whatever Ben Bernanke and the Federal Reserve says swings the yield as much as 5% in any given day.  Last week, when the Fed announced they were going to continue buying US debt, the yield was down over 5% in a single day.  Today the Fed announces that the economy is very slow to recover and there could be joblessness, is this even a word?, of over 10% before we see a turn around.  That sent the 10 year yield soaring by over 4%.  The Fed just continues to move the 10 year treasury rate yield at will.

With this being said, expect refinance rates to continue to follow the 10 year yield.  I am still trying to analyze if the yield hit the lower trendline and bumped back up.  This sure looks to be the case from this chart.  Maybe some of the technical analysts out there can help me out because I thought the trendline was broken last week; obviously I misread the lower trendline.  That being said, if the 10 year treasury rate yield pushes higher, refinance rates are sure to follow.

Overall mortgage rates have already pushed up this week and it may continue if the 10 year yield continues higher.  After a 4% leap in one day we could see consolidation tomorrow.  If the uptrend that started back in January continues on the 10 year, look for refinance rates to continue higher throughout the summer.  It is very difficult to predict right now because the Federal Reserve Bank has so much influence so we can only base our decisions on their moves.

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