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Interest Rates Increasingly Focused on Stimulus

Posted To: Mortgage Rate Watch

The bond market, which drives interest rates, is in the habit of reacting to big developments that impact the economy and inflation. At present, bonds are forced to wait for several such developments, but only one of them might come into focus this month. The developments in question are all very different, but all are important in their own way. They are: The path of the pandemic and resulting impact on the economy The presidential election and resulting fiscal policy changes The much-debated 2nd installment of fiscal stimulus (covid-19 relief) Naturally, the pandemic’s economic impact will take years to be fully understood. On that front, there will be no single event that decides the fate of the market and interest rates. The election, on the other hand, has a definitive result and deadline…(read more)

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