Steep climbs tend to fizzle out at the end, as the momentum fades. This estimate range of 2.8% to 3.1% assumes a 1 to 2 year delay. For a description and reasoning behind my first estimate of 3.2%, see here.
I see no reason to panic. There is no drama here, at least not yet. The drama would start, for me, if we breach the red line by a sizable margin. Until that point, I continue to strongly believe that the long-term trend in the 30-year Treasury yield will continue to exponentially decay. And not in spite of the M2 money stock growing exponentially, but at least partially because of it.
The king of bonds may thought to be dead, but long live the king!
Bonus thought:
ReplyDeleteAs house prices skyrocket higher, does anyone really think that this economy can tolerate higher mortgage rates?
Can’t have it both ways. Can’t argue that house prices and interest rates can both skyrocket higher together forever. At least one of the two will eventually break. Perhaps spectacularly. Again.
Houses will break, but with real estate it's always location, location, location. Can't see housing prices rising much in the Pearl District right now.
ReplyDeleteSeattle real estate isn’t in much danger of sinking soon. Figurately, not necessarily literally.
ReplyDeleteProperty Watch: A Curvy Little Lake Union Houseboat
Listing Fast Facts
2401 N Northlake Way Slip G6
Size: 675 square feet on a 60-foot slip, 1 bedroom/0.75 bath
List Date: 3/19/2021
List Price: $699,000, $1150/month slip rent and liveaboard fee
My retirement nest egg suddenly feels woefully inadequate, and cracked, and leaking egg yolk.
No worries here. After the $1150 fee I won't have anything left for a mortgage payment anyway so I'll keep looking elsewhere for my dream three-quarters bathroom!
ReplyDeleteAnonymous,
ReplyDeleteCan I interest you in a $250,000 unit with a one-quarter bathroom?
Pittsburgh first: A $250,000 automatic public pay toilet, 25 cents per visit
Badum-ching.
Thank you very much. I’ll be performing here all week. ;)