Wells Fargo Refinance Mortgage Rates – Yields Move Rates Higher
Posted on | October 23, 2009 | No Comments
Wells Fargo refinance mortgage rates have been around 5% for over a month. The 10 year treasury rate yield has been in a steady down trend but after hitting support at the 200 day moving average could yield move mortgage interest rates higher? For much of the summer we saw the 10 year treasury rate yield up trending which caused the conventional 30 year fixed mortgage rate to remain above 5%. It took the 10 year yield to start a down trend before we saw rates fall back below 5%.
After a few months of grinding sideways or heading down the 10 year treasury rate yield has found support at the 200 day moving average. This support level was tested the exact same week that the Federal Reserve Bank announced that they are going to conclude their treasury purchase program. The program is set to be complete by the end of October.
When the Fed stops sinking money into treasuries there is a good chance that treasury yields will increase to make treasuries an attractive investment. If China and Japan do not see treasuries as an attractive investment the yields on these notes will continue to rise until investors start to sink large amounts of money into them. These investors did not have to exists in the recent past because the Fed was buying up treasuries.
With this in mind, there is a good chance that the 10 year yield will start an up trend. At Subprime Blogger we correctly predicted the short term up trend that we are currently in. We felt that the bounce off the 200 day moving average would lead to yields moving all the way up to the 50 day moving average. This is exactly what has happened.
Now we are waiting to see if yields move well above the 50 dma and start trending higher. If this is the case then we are going to see higher mortgage interest rates just like we did over the summer. There is still a good chance that the 50 dma will serve as resistance and treasury yields could grind sideways to down again; only time will tell.
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Author: Jesse Wojdylo
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