On The Market Bond “Vigilantes” Hold Interest Rates Hostage as Rate Cut Hopes Shrink
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Jan 9, 2025 Interest rates are on the rise, even post Fed cuts, leaving bond investors anxious about lasting inflation. The concept of 'bond vigilantes' is explored, revealing their influence on mortgage rates. Amid these challenges, optimism shines through with hints of a commercial real estate recovery and homeowners finally listing properties for sale. A state is pushing insurance companies to adapt policies in risky areas, raising the question of government intervention versus market burden. Innovative solutions, like modular housing, are discussed for tackling housing challenges.
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Bond Vigilantes' Impact
- Bond vigilantes, influential investors, are currently impacting the bond market.
- Their actions are causing a surge in bond yields, affecting mortgage rates.
Bonds and Inflation
- Bond yields heavily influence the economy, especially mortgage rates.
- Fear of inflation drives up bond yields as investors avoid bonds, demanding higher returns.
Navigating High Rates
- Anticipate higher rates and adjust investment strategies accordingly.
- Underwrite deals conservatively, without relying on future rate drops.
