The apartment building investment loan rate we track moved down from last week’s 4.532% to just under 4.5 at 4.489% aided by the spread to the 10yr Treasury (T10) compressing to 2.142 versus the week earlier 2.185. Meanwhile the T10 and the ULI rate seem determined to raise rates even if the Fed doesn’t act. And Greece is set to Continue reading Aided by falling spread, apartment loan rate fights its way back below 4.5%.
Are interest rates caught in a Catch-22? What if the Fed is waiting to raise rates until the economy is growing stronger but the economy won’t grow stronger until rates go up?
For three years everyone has ‘known’ that interest rates were going up but other than during the Taper Tantrum of June 2013 which affected loan rates more than Treasuries, the T10 only moved up to the 2.75% area which was just picking itself off the floor of 1.66 where it got down to in May that year.
The Fed would like to raise rates, if for no other reason than to prove they aren’t turning Japanese by leaving rates low for two and a half ‘Lost Decades’. They’d also like to have room to lower them again if the economy dips back into recession (Note Q1 GDP was just revised down to -.7% that’s Continue reading Are Interest Rates Caught in a Catch 22?