Rising 10 Year US Treasury Yields
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Real estate investors generally don\\u2019t care about short-term interest rates. The short term rates affect the cost of capital for bridge financing where those loans are indexed to the secure overnight funds rate. Short term debt can be replaced with permanent financing. I really painful increase in borrowing costs is tied to long-term interest rates.
\\nWe have experienced an inverted yield curve for much of the past two years.
\\nThis past week, yields on the 10 year Treasury hit 4.5%, a 16 year high. When you read the mainstream media, it\\u2019s as if the pricing for the 10 year Treasury is linked to inflation expectations and to some forecast of the Fed\\u2019s higher for longer narrative.\\xa0
\\nThe question is why have the yields on US government debt increased in particular over the last 60 days? The United States has issued $1 trillion of new debt over the last three months. They have literally flooded the market. When you flood the market with any commodity, prices will fall which means yields will rise.
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\\nHost: Victor Menasce
\\nemail: podcast@victorjm.com
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