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The Impact Of The Covid Economic Shutdown On The Yield And Dollar Swaps Curve (Mortgage Rates Down Over 100 Basis Points Since 03/13/20)

by confoundedinterest17

The various state economic shutdowns, particularly devastating to small businesses such as non-chain restaurants, has taken a serious toll on the US and global economies.



We can see the effects in the US Treasury Actives and US Dollar Swap curves. Compared with 03/02/2020, both the Treasury yield and US Dollar Swaps curve have steepened on the short-end.

Residential mortgage rates in the US have fallen over 100 basis points for the 30Y Fixed-rate mortgage. Mortgage rates are converging to near 3%.

And bond volatility has declined to an all-time low with The Fed’s rapid monetary expansion.

I guess Fed’s Jerome Powell is Mr Freeze!

 

 




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