August 8th, 2010 12:37 PM by Eric Fang
Last Friday, after the job report release, the Bonds rallied and the stock indexes unchanged. That means the bond traders and stock trader have different opinion about theeconomy. The bond traders are more pessimistic about the weak economy.
Goldman Sachs lowest the Treasury Yeilds to the target of 2.5% for the next 12 months. And according the weekend WSJ, the fund Hoisington Investment Mangement still bets on the bonds(This fund's only holding is bond and cash). And Hoisington Investment started purchasing of bonds since 1990s. If the above forecast is correct, we will see lower rates.
Though we all agree the rates are lower, do we still just wait or continue refinance? Yes. A few reasons. 1)You can save money earlier if you refinance now. Especially if your rate is high. 2)The value could be lower. It is possible that you can not refi even when the rate is low, but the value does not support. 3)If we will see lower rates, it will be 4 months away, you will not lose anything. 4)Usually we don't bet on the lowest rates, so you can still focus on whatever you are doing and have a peaceful mind to refi when the rate is lower(You don't have to watch the rate all the time, it's not fun).
Just FYI, the fed lend the money to IBM for the interest rate of 1% to hope those big companies to create jobs. Will it work or not? Let's wait and see.