| Stock markets – Interest rates rose further this week. Treasury bond yields rose to their highest levels since 2007 and mortgage rates hit a 23-year high on Wednesday. They backed off slightly on Thursday and Friday. As reported last week there has been recent data suggesting that the economy and consumer spending has heated up. Inflation has ticked up over the last two months after falling steadily every month since June. The U.S. credit rating downgrade and the massive amount of debt that needs to be financed has caused an oversupply of treasury bond sales which has contributed to higher interest rates. Friday, the Producer Consumption Expenditure Index, a key gauge of inflation, came in slightly better than expected, and rates settled slightly. Everyone is waiting for the release of the September job report next Friday. The Fed is committed to slowing hiring as the shortage in labor has pushed up wages and encouraged consumer spending which is inflationary. The Dow Jones Industrial Average closed the week at 33,507.50, down 1.3% from 33.963.84 last week. It is up 1% year-to-date. The S&P 500 closed the week at 4,298.05, down 0.5% from 4,320.08 last week. It is up 12% year-to-date. The Nasdaq closed the week at 13,219.32, almost unchanged from 13,211.81 last week. It is up 26.2% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.59%, up from 4.44% last week. The 30-year treasury bond yield ended the week at 4.73%, up from 4.53% last week. We watch bond yields because mortgage rates follow bond yields. Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of September 28, 2023, were as follows: The 30-year fixed mortgage rate was 7.31%, up from 7.19% last week. The 15-year fixed was 6.72%, up from 6.54% last week. Have a great weekend! |
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