Over the last few weeks the rates on five year fixed mortgage have steadily risen as the corresponding bond yields have also increased. This all has to do with recent concerns with inflation or better yet a game of cat and mouse between bond traders and the FOMC ( Federal Reserve’s Federal Open Market Committee) which sets the US federal funds rate. You see the traders believe that the FOMC have the funds rate set too low so as a result they are pushing the yields up higher to see if the FOMC will react.
You may be asking how does this effect you and me here in Canada. Well their actions have increased the yield of our five year bonds and thus drove our fixed rate mortgages higher. Mortgages which as of late were at historic low rates. So … Read more