Spreads Hit 22 Year High
Increasing spreads... Hattip to Bloomberg, Today...
the extra yield that investors demand to own agency mortgage backed securities over 10 year U.S. Treasuries reached the highest since 1986.
On a similar note, the difference in yields on the Bloomberg index for Fannie Mae's current-coupon,
30-year fixed-rate mortgage bonds and 10- year government notes widened about 3 bps to 206 bps, or 72 bps higher than Jan. 15.
The spread helps determine the interest rate homeowners pay on new prime mortgages of $417,000 or less.
Rising rates... Another rate that determines rates on ARM's, the three-month London interbank offered rate,
or Libor, for euros advanced 1 basis point to 4.40% today, the highest since Jan. 18.
The difference between what banks and the government pay for three-month loans also indicated an increased reluctance to lend.
The TED spread widened to 1.41% today, from 1.37% yesterday and 1% a month ago.
Average 30-year fixed mortgage rates climbed last week to 6.24, from 6.17% in the last week of 2007.
the extra yield that investors demand to own agency mortgage backed securities over 10 year U.S. Treasuries reached the highest since 1986.
On a similar note, the difference in yields on the Bloomberg index for Fannie Mae's current-coupon,
30-year fixed-rate mortgage bonds and 10- year government notes widened about 3 bps to 206 bps, or 72 bps higher than Jan. 15.
The spread helps determine the interest rate homeowners pay on new prime mortgages of $417,000 or less.
Rising rates... Another rate that determines rates on ARM's, the three-month London interbank offered rate,
or Libor, for euros advanced 1 basis point to 4.40% today, the highest since Jan. 18.
The difference between what banks and the government pay for three-month loans also indicated an increased reluctance to lend.
The TED spread widened to 1.41% today, from 1.37% yesterday and 1% a month ago.
Average 30-year fixed mortgage rates climbed last week to 6.24, from 6.17% in the last week of 2007.
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