Back in June I highlighted the resistance the 10-Year Treasury Rate was running into. This is an update of the same chart I featured then. It has since pulled back dramatically suggesting both slowing economic growth and growing risk aversion on the part of investors.
That’s what the rearview is telling us. Looking forward, however, the drop in this key rate should mean lower mortgage rates while, at the same time, it’s 3.5% yield makes virtually every alternative asset class look more attractive in comparison.