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The higher the rates, the bigger the rate drops(in the future)
December 10th, 2010 10:54 PM

We are patiently waiting for the perfect "timing" for the rate drops. A little bit different from previous jumps, since the rate went up about 0.75% for the past 30 days, the rate can have a big drop in the future when the bond traders "love" bonds again.

Usually my strategy is to float the loan at the current level. My reason is very simple: we will only lock if we strongly believe that the current rate is at the bottom and the future rates will go higher.

If we take a look at the 10 yr bond chart of Nov 2009 to June 2010. It took about 6 months to have the rates back to lower. I think a lot of people will be happy IF it goes back to previous low level.


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Posted by Eric Fang on December 10th, 2010 10:54 PMPost a Comment

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