The Message in the Markets: Higher Rates Are Coming
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We are not big market-watchers at LA Land, but sometimes the earth shifts just a little bit beneath our feet and it is worth noting. Today is one of those days:
The Dow Industrials fell another 198 points today, and have now lost 2.9% over four days. Investors see higher interest rates coming, and they don’t like it.
Mortgage rates rose to ten-month highs this week as investors did the Fed’s work in advance. Inman.com: ‘In Freddie Mac’s survey, the 30-year fixed-rate mortgage jumped to an average 6.53 percent from 6.42 percent a week ago.’
Lastly, most important to us, the Big Kahuna of the Bond Market, Bill Gross of PIMCO, put in a sudden bet on higher rates. Reuters: ‘Gross forecast that benchmark Treasury yields will range higher than previously thought, prompting him to acknowledge he is now a ‘bear market manager’ after a quarter of a century as the global bond market’s most powerful bull.’
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Photo Credit: Reuters