Wednesday, August 21, 2013
Ten Year Bond Yields
When the yield on the 10 year bond goes up it indicates that the long term interest rates is going up. When interest rates goes up it will affect a lot of investments in the economy. It will affect the stock market, the housing market, credit card, personal loans and so on.
Due to the increased cost of borrowing it will affect investments in the stock market because the margin rate will also increase. It will affect the housing market because less people are willing to commit on new housing and as a result prices will have to come down. For those who have bought they will also be affected due to increased mortgage payments. Hence it will affect the overall economic activity.