When the long term Treasury Bond yields are down that generally means GOOD NEWS for interest rates (the cost or price you pay to borrow money) on mortgages, car loans, and any other debt you may have. This is due to the lower demand for money or borrowing money. If you look at money like a gallon of milk; the more people want to buy the milk (borrow money) the more the price will go up. So if we have a strong economy in Europe, China and the US, more people wanting to borrow money (buy milk), more people chasing after borrowing money (buying milk) the less money (milk) to go around and then the interest rate to pay to borrow the money (buy milk) goes UP. This is a very simplified example and there are many more factors that go into interest rates but this should give you a general understanding of the cost of money/interest rates we pay to borrow money to buy stuff. #myomesavannah #teamyannett #savannahrealestate #edyannett
“A key reason 10-year Treasury bond yields have fallen from about 3.1% in Mid-November to just 2.75% today, despite a strong domestic economy, is the weakness in Europe. Yields on 10-year German bonds have fallen from 0.55% in October to just 0.15%. Why? Italy is in recession, Brexit hangs over the continent and European GDP growth is just half what it is here! Thus, Treasuries are suddenly looking much more attractive.
Elliot F. Eisenberg, Ph.D.