Why a Fed Rate Hike Won’t Affect Mortgage Rates in the Short Term

Normal media channels do a terrible job of explaining what affects mortgage interest rates. And rest assured, every time the Fed talks about or raises interest rates, the cable news networks start shrieking about how mortgage rates are going up in a cloud of their own ignorance.  An appetite for investors to buy Mortgage Backed Securities (MBS) and US Treasury Notes, particularly the 10 Year Treasury Note (10 Year UST), are in fact the driving factors of mortgage rates and that appetite continues to be healthy.  When people invest in Treasuries and MBS, the yields drop and when their yields …