Last week’s stock market gyrations had pundits professing that the 10-year Treasury note was to blame.
You may be wondering exactly what that means for you. Because with all the anxious screeching on the financial shows, it can sound rather scary.
I’m here to tell you to relax. Like many things pundits say are bad nowadays, it’s actually a good thing.
During the years of zero percent interest rates under President Obama, the US had a 1.6 percent average growth rate over his eight-year term.
The truth is, that economy was reliant on artificially low rates, and the very low 10-year yields translated into a low-growth, stagnant “gig” economy.
Today’s economy is stronger by pretty much every economic indicator. And the Fed has raised rates five times since President Trump won the election, compared with just once under Obama.
The Fed moves the short-term yields, like credit card rates, auto loans and short-term bills. But the 10-year has agreed with the Federal Reserve and moved yields up on its own, affirming the view that the economy is strong and vibrant.
So, yes, car loan rates will move up a few bucks off of teaser rates, and mortgage rates are also up, hitting 4.58 percent, according Freddie Mac, the defunct government mortgage machine.