Bouncing off the Ceiling – The Conflict Between Poor Economic Data and Record-Low Rates

The bottom line is, rates aren’t improving this week, not because economic data doesn’t support it, but because they can’t. When a 7-10 year investment yields between 2.5-4%, many investors will question the point of making such an investment, and will often look to other-higher yielding options. Corporate bonds may be quite attractive right now due to their higher yields and the strong profit figures many corporations are returning. Mortgage and Treasury rates are so low that only continued poor economic results can keep them there.