Have fun with this one: The Fed hikes, and mortgage rates fall. True. And it’s not the first time! Long-term rates have fallen after each of the three increases in the cost of money since the election. Thirty-year fixed rate mortgages are a closing-cost argument below 4.00 percent, and the 10-year T-note is down to 2.15 percent. Before the whys and wherefores, get one thing straight: If it were not for the Fed marching the overnight rate upward, long-term rates would be falling more — maybe a lot, a half-percent or more from here, unwinding the entire post-election rise and then some. The 10-year T-note this past week. Note the lurch downward before the Fed’s rate hike, and grudging rise afterwards. Hatred of the Fed is a branch of market dislike for regulation and government in general, which distorts much analysis of cause and effect, especially in perverse trading like this. Charlatans are selling the story that long-term rates are falling in a pre-recession signal t…
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