[Normal]

The treasury climbed today to over 5%. Will debt, foreign bond rates, compression and earnings force the lending rate in the US up higher than the 7% we now enjoy? How will the FED respond?

[Kenswing]

Originally Posted by Normal

The treasury climbed today to over 5%. Will debt, foreign bond rates, compression and earnings force the lending rate in the US up higher than the 7% we now enjoy? How will the FED respond?

I love the higher interest rates. Gives me extra spending money.

My first mortgage was an 11% VA loan. That was considered a great rate at the time.

[Jayhawk]

The average 30-year fixed-rate mortgage in the United States has been 6.81% as of May 16, 2025, according to Trading Economics. Since 1971, the average has been 7.71%, with rates fluctuating significantly over time.

[Normal]

Originally Posted by Jayhawk

The average 30-year fixed-rate mortgage in the United States has been 6.81% as of May 16, 2025, according to Trading Economics. Since 1971, the average has been 7.71%, with rates fluctuating significantly over time.

If we hit that norm, we should see interest rates around 10%. That would be great for CDs and bonds. There is always a positive side. Cash on the sidelines may be the way to go.

[jimmyinvillages]

I would recommend people who are blessed to have purchased homes decades ago with higher interest rates but MUCH lower cost of housing and more importantly income - housing cost ratio not do a tired take of 'back in my day rates were 15-18%!

With today's entry level cost of housing + interest rates + dollar depreciation + wages that haven't kept up with housing/education inflation, today's young people are understandably stressed.

[shaw8700@outlook.com]

Maybe others will!

[Zenmama18]

Originally Posted by Kenswing

I love the higher interest rates. Gives me extra spending money.

My first mortgage was an 11% VA loan. That was considered a great rate at the time.

Our first was 12 3/8% and we felt lucky to get that!

[oneclickplus]

Originally Posted by Normal

The treasury climbed today to over 5%. Will debt, foreign bond rates, compression and earnings force the lending rate in the US up higher than the 7% we now enjoy? How will the FED respond?

Higher interest rates are good for us savers.

Proverbs 22:7 - ... the borrower is slave to the lender

Don't be a slave.

[oneclickplus]

Originally Posted by jimmyinvillages

I would recommend people who are blessed to have purchased homes decades ago with higher interest rates but MUCH lower cost of housing and more importantly income - housing cost ratio not do a tired take of 'back in my day rates were 15-18%!

With today's entry level cost of housing + interest rates + dollar depreciation + wages that haven't kept up with housing/education inflation, today's young people are understandably stressed.

Today's high housing costs are precisely because people can borrow money. Without mortgages (or at least without significant down payments), prices escalate. This is because it becomes not "how much can you afford" but rather "how much can you afford to borrow".

[Ptmcbriz]

Since it will hurt the economy, I hope not. There are far more negatives to it, than the positives of higher bond rates. Hoping for high interest rates because of the bond market is flat out selfish in my opinion. We all know the negative impact of high interest rates that ripple through our society and it won’t be pretty. However, I’m not seeing anything planned or happening that is going to turn it around. The administration seems to be roaring down the train tracks full speed ahead, knowing the tracks go over a cliff. Yet, there is no change in direction.

I heard a recent plumbing company who sells a custom part manufactured in China recently ask at a conference that if they brought their manufacturing back to the US and built a plant and manufactured the part here it would be $285, vs their competitors that keep manufacturing theirs in China that cost $153, which will they buy? Of course, the majority said the $153 one. That is what we are up against. Manufacturing will never come back to the US unless it’s something highly specialized high tech. Until that’s realized we are in a forced unnecessary economic decline that never needed to happen.

[Cuervo]

The ideal is not to have a mortgage, but if that is something that is needed you have to do your homework.
My daughter has a very low mortgage rate, she always kept her eye on the rates and when the rates were dropping, she refinanced, she did this twice that I know of and has a fixed mortgage.
Some people go into these things with blinders, looking for the best deals at the time which are flexibles, without considering that the rates they have agreed to can increase.
There is an informative movie titled "The Big Short" I think everyone should watch, it somewhat touches on flexible mortgage rates.

[Pballer]

In a year J Powell will be gone, to be replaced by an easy money political hack, and irresponsible low interest monetary policy will resume.

[rsmurano]

Powell is out of touch. He was late raising rates during the 2022 recession and now he’s late lowering them while inflation is way down.

Housing prices go up and down because of supply and demand. Every new house that is built here in TV goes thru a lottery system with dozens/hundreds of people going for the same house. I have multiple friends that have lost out up to 7 different lotteries for a new Eastport lot/house.

There are many many people buying homes with cash. Actually I don’t know of any friends that have a mortgage. Cash is king so high interest rates helps people with cash. IMO again, retires should never take out a mortgage or a car loan, you should use cash, except if you can get a 2-3% mortgage or a 1% car loan while using your money in the stock market where it’s making good money.Right now, even with rising rates, I have new stocks I invested in 6 weeks ago making up to 80% gains, which will cover and 1% gain in interest rates if I had any loans.

How many USA companies are popular with people that build top notch products? John Deere, Harley Davidson, ps audio, and there are many others. The reason GM, Ford, and especially Stellantis aren’t selling is because they are terrible compared to just about any other auto manufacturer IMO of course.
I’ll never buy a gm, ford or Chrysler product, while I buy new imports every 2 years.

[jasamy2]

Interesting. Do you care to share what stocks you bought 6 weeks ago that are returning at an 80% rate?

Originally Posted by rsmurano

Powell is out of touch. He was late raising rates during the 2022 recession and now he’s late lowering them while inflation is way down.

Housing prices go up and down because of supply and demand. Every new house that is built here in TV goes thru a lottery system with dozens/hundreds of people going for the same house. I have multiple friends that have lost out up to 7 different lotteries for a new Eastport lot/house.

There are many many people buying homes with cash. Actually I don’t know of any friends that have a mortgage. Cash is king so high interest rates helps people with cash. IMO again, retires should never take out a mortgage or a car loan, you should use cash, except if you can get a 2-3% mortgage or a 1% car loan while using your money in the stock market where it’s making good money.Right now, even with rising rates, I have new stocks I invested in 6 weeks ago making up to 80% gains, which will cover and 1% gain in interest rates if I had any loans.

How many USA companies are popular with people that build top notch products? John Deere, Harley Davidson, ps audio, and there are many others. The reason GM, Ford, and especially Stellantis aren’t selling is because they are terrible compared to just about any other auto manufacturer IMO of course.
I’ll never buy a gm, ford or Chrysler product, while I buy new imports every 2 years.

[Aces4]

Originally Posted by Ptmcbriz

Since it will hurt the economy, I hope not. There are far more negatives to it, than the positives of higher bond rates. Hoping for high interest rates because of the bond market is flat out selfish in my opinion. We all know the negative impact of high interest rates that ripple through our society and it won’t be pretty. However, I’m not seeing anything planned or happening that is going to turn it around. The administration seems to be roaring down the train tracks full speed ahead, knowing the tracks go over a cliff. Yet, there is no change in direction.

I heard a recent plumbing company who sells a custom part manufactured in China recently ask at a conference that if they brought their manufacturing back to the US and built a plant and manufactured the part here it would be $285, vs their competitors that keep manufacturing theirs in China that cost $153, which will they buy? Of course, the majority said the $153 one. That is what we are up against. Manufacturing will never come back to the US unless it’s something highly specialized high tech. Until that’s realized we are in a forced unnecessary economic decline that never needed to happen.

Yeah, ain't it nice for the plumber's bottom line! But what Americans don't understand is while 're they paying a little less for their plumbing, they are shelling out huge money in health care, food stamps, housing subsides, etc. because many people aren't making a decent wage in America. You'll pay the piper one way or the other and either be propping up this country or the other one.