About this chart: This is the chart of the US Ten-Year Treasury bond. First note the inverse relationship: As bond prices go down, the interest yield goes up. You can see the major low (94) in the bond market in January 2002. This is when 30-year home mortgages were at 8%. As inflation slowed, the bond yield went down with the bond chart showing the rally to 140. That year the 30-year home mortgage rate fell to 3.1%. Some borrowers were able to lock in rates as low as 2.87. This week, as inflation surges in the US and around the world, the Ten-Year Bond market dropped to 104. Now 30-year mortgage rates are quoted at 7.5%.
What does this mean for you: As the bond market sell-off continues, it is not only damaging to the US home and commercial property industries, but it also has investors reducing risk. They are pulling money out of hedge funds that have been fueling the rally in the commodity markets.