Mortgage Rates Could Be Set to Rise!!!

Mortgage rates have risen considerably over the last few days. US Treasury yields rose to the highest level in 7 months on Monday. This followed a Friday Labor report where the job loss in May (345,000) was much less than expected (520,000). The dramatic slowing in the rate of job losses convinced many that the economy was set to rebound in the second half of the year from the worst recession in decades and that the Fed will have to depart from its near-zero interest rate policy. Short-term rates are pricing in a 0.5 increase in the Federal Funds rate in this December. With the government selling huge amounts of bonds to finance its economic recovery and financial rescue efforts, the latest move up in yields reinforced a trend that has been in place since the start of the year that has seen bond yields rise. When investors decide to move their money into the stock market, bond yields go up. If no one wants to buy our bonds, the yields must go up. When Bond Yields rise, rates go up.

Here's the schedule of bond sales this week:

Tuesday $35B 3-yr Notes
Wednesday $19B 5-yr Notes
Thursday $11B 30-yr Notes


Here's a short video from some Wall Street experts on what the sale of bonds could mean this week... stay tuned!!!