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By G. Steven Bray
The direction of US mortgage rates should be governed by things that happen here in the US, right? Nope. That hasn’t been the case for several months. While the US economy has revealed some unexpected strength, interest rates are hitting 18-month lows. Strong economic data typically pushes rates up.
The problem with that theory is the US economy is an island in a sea of despair at the moment. Europe appears headed for another recession if not depression, China is faltering, and Japan is still a basket case. Money is fleeing these economies for the safety of the US, and that’s keeping a check on rates.
Will it continue? I think odds are it will for the near term. One fly in the ointment is the jobs report this Fri. While the market has mostly ignored the report the last couple months, another particularly strong report could create some ripples.
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