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last updated 15 November 2022
Overview | Mortgage | CDs - Bonds - T Bills | Inverted yield | Terms

interst rates, 1955-2015
The Fed Funds Rate and Low Long-Term Interest Rates | FRED
Federal Funds Rate compared to Treasury Bonds & Inflation | wikipedia
30-yr-FRM-10-yr-2-yr-3-mo-Ttreasury | FRED

Mortgage Rates:

interst rates, 2017-2020
TCM - Treasury Constant Maturities
. - An interest rate per annum equal to one and one-quarter percent (1.25%) in excess of the yield in percent per annum as shown for three (3) year Treasury constant maturities.
Does the Federal Funds Rate Affect mortgage rates | HSH
Mortgage Rates FRED |
15 vs 30 year FreddieMac

Simple loan payment calculator | BankRate

Historical: as of Nov 20, 2022

30-Year Fixed Rate Mortgage Average in the United States | FRED | St. Louis Fed

Last 3 months at hsh Click on Rate Graph

30-Year Fixed-Rate Mortgages Since 1971 - FreddieMac

Fixed Income - CDs - Bonds - Treasury bills

January 2019
1yr 2yr 3yr 5yr 10yr 20yr 30yr+
CDs (New Issues) †FS 2.60% 2.85% 3.00% 3.25% 3.55% -- --
U.S. Treasury †F 2.56% 2.54% 2.51% 2.53% 2.72% 2.91% 3.08%
U.S. Treasury Zeros * 2.56% 2.54% 2.55% 2.56% 2.81% 3.02% 3.12%
Agency/GSE ‡ 2.70% 2.77% 2.93% 3.20% 3.94% 4.27% --
Corporate (Aaa/AAA) †FS 2.66% 2.35% 2.72% 2.92% -- 3.92% 4.32%
Corporate (Aa/AA) †FS 2.82% 3.11% 3.26% 3.41% 3.73% 4.24% 4.79%
Corporate (A/A) †FS 3.02% 3.43% 3.56% 4.04% 4.51% 5.13% 5.42%
Corporate (Baa/BBB) †FS 4.06% 4.92% 5.40% 6.06% 7.26% 7.74% 7.31%
Municipal (Aaa/AAA) †S 1.89% 1.95% 2.08% 2.30% 3.05% 3.75% 3.49%
Municipal (Aa/AA) †S 2.00% 2.17% 2.45% 2.65% 3.33% 4.00% 4.20%
Municipal (A/A) †S 2.04% 2.20% 2.71% 2.80% 3.55% 4.07% 4.35%
Taxable Municipal †FS 2.92% 3.03% 3.63% 3.86% 4.35% 4.29% 5.00%
† FS- Taxable Federal and State
† S- Taxable State (In states which have income taxes)
† F- Taxable Federal
* zero-coupon bonds, do not pay a regular coupon. Instead, they are sold at a discount to their face (or par) value.
‡ government-sponsored enterprises (GSEs), which are federally chartered corporations but publicly owned by stockholders

Source: Fixed Income & Bond Yields - Fidelity

30-Year Treasury Constant Maturity Rate | FRED | St. Louis Fed

Inverted yield curve:

At The Impact of an Inverted Yield Curve Mar. 2019, Investopedia says,
"The term yield curve occurs when short-term interest rates exceed long-term rates.
Long Term rates are usually higher because of the risk of interest rate rise, reducing the value of the bond.

Historically an inverted yield curve has been viewed as an indicator of a pending economic recession. Fortelling a fall in long-term fixed income yields.
The yield curve inverted roughly 14 months before each of the past nine U.S. recessions.

Source: 10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity | FRED | St. Louis Fed

I found the rationals confusing.
At Inverted Yield Curve:Definition, Predicts a Recession The Balance says,
An inverted yield curve means investors believe they will make more by holding onto a longer-term Treasury than a short-term one. They know that with a short-term bill, they have to reinvest that money in a few months. If they believe a recession is coming, they expect the value of the short-term bills to plummet soon. They know that the Federal Reserve lowers the fed funds rate when the economy slows. Short-term Treasury bill yields track the fed funds rate.
So, as demand goes down yield must go up to attract investors.

The effect:
Financial institutions which borrow short term and lend long term suffer.
Short term T bills will be more attractive than corporate bonds and stocks.

More recently, this viewpoint has been called into question, as foreign purchases of securities issued by the U.S. Treasury have created a high and sustained level of demand for products backed by U.S. government debt.

While experts question whether or not an inverted yield curve remains a strong indicator of pending economic recession, keep in mind that history is littered with portfolios that were devastated when investors blindly followed predictions about how "it's different this time."

What it does signal in the short term is likely stop in raising rated by the Fed and a possible lowering of the federal funds rate.

Ken Fisher, wall street analyst and financial advisor, says,
"Such a shallow inversion (12 basis points between the 3-month and 10-year US Treasury yields, as of market close on May 30, 2019) is largely indistinguishable from a flat or slightly positive curve, and overall, the global yield curve matters most.
We live in a world where big banks can borrow in one country, hedge for currency risk if they like, and lend in another--seizing arbitrage opportunities from different countries' different interest rates. Today's global yield curve is positively sloped, helped both by negative short-term rates across Europe and Japan."

The rapid fall in rates is more of a concert. It means there is more demand for fixed rate investments over securities.

T-bill rates:
T-bill rates are determined by Treasury auctions, which occur weekly for short term rates. 1 year and longer maturity rate auctions are held monthly. There are 23 authorized primary dealers that include institutional investors, including banks, broker/dealers, investment funds, retirement funds and pensions, foreign accounts, insurance companies and other organizations.

The higher the yields on 10-, 20- and 30-year Treasuries, the better the economic outlook.

The federal funds rate is the primary tool that the Federal Open Market Committee (Fed) uses to influence interest rates and the economy.
The interest rate at which banks and other depository institutions actively trade balances held at the Federal Reserve, called federal funds, with each other, usually overnight.
Changes in the federal funds rate influence the borrowing cost of banks in the overnight lending market, and subsequently the returns offered on bank deposit products such as certificates of deposit, savings accounts and money market accounts.

Prime Rate - The rate at which banks will lend money to their most-favored customers. The Wall Street Journal surveys the 30 largest banks, and when three-quarters of them (23) change, the Journal changes its published prime rate.

Treasury bills, bonds, and notes are debt instruments that the government issues.
T-bills are short-term bonds that mature within a year.
T-notes have maturity dates of ten years or less
T-bonds are long-term bonds that offer maturities of 20 and 30 years.

10-Year Treasury Note - A debt obligation issued by the United States government that matures in 10 years. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. The interest payments are exempt from state and local income tax. However, they are still taxable at the federal level.

Treasury Notes can be sold before maturity. If the interest rates have gone up the value will be lower than the face value. If interest rates go down the value will be higher.

T-bill - A short-term debt obligation backed by the U.S. government with a maturity of less than one year. Commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks).

Mortgage Rates: Mortgages come in several vareties.

Term - Typically 15, 20 and 30 years

Fixed Rate - Rate is the same for the term of the mortgage.

ARM - Adjustable Rate Mortgage.
Rate can change after some specified fixed period (frequently 7 years).
A 10/1 ARM has a fixed rate for 10 years and adjusts annually for the remaining term. A 5/1 ARMs rate is fixed for 5 years.
Lenders base ARM rates on a variety of indices, the most common being rates on one-, three-, or five-year Treasury securities.
They are regulated by the Federal government, with caps on charges. Typically 2% per year or 5% or 6% for the life of the loan.
ARMs generally permit borrowers to lower their initial payments if they are willing to assume the risk of interest rate changes.

FHA - A mortgage insured by the Federal Housing Administration. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan.

APR - Annual Percentage Rate - The interest rate for a whole year (annualized), rather than just a monthly fee/rate. It is slightly higher than the nominal rate, Because of compounding the bank gets more when you pay each month rather than hang on to your money until the end of the year.

Points - A % paid up front at the time of the loan.

May 2015 typical rates:
30-year fixed     4.125%
30-year fixed FHA 3.750%
15-year fixed     3.375%
7/1 ARM 30-year   3.125%
Source: Today's Mortgage Rates and Refinance Rates - Home Mortgage - Wells Fargo

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About Interest Rates in Business
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United States Average Monthly Prime Lending Rate | 1950-2015 | Data | Chart