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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4542
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Since the election has the ten year treasury note bond gone

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since the election has the ten year treasury note bond gone up or down? what does this mean for mortgage rates? what does yield mean? is it the interest rate of the bond or the premium of the bond?

Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

To begin with, let me explain the relation of a bond price and its yield. Note that the Price of a bond and its yield are INVERSELY related. So, if one goes up, the other comes down, and vice versa.

For example, If you buy a bond with a 10% coupon at its $1,000 par value, the yield is 10% ($100/$1,000). Pretty simple stuff. But if the price goes down to $800, then the yield goes up to 12.5%. Therefore, Yield means is the amount of return an investor realizes on a bond.

Having said this, currently, the US 10-YR bonds have been declining and therefore, as a result, the Yields are RISING.

Mortgage rates tend to increase when the yield rises. However, note that It is important to know that Treasury yields only affect fixed-rated mortgages. The 10-year note affects 15-year conventional loans while the 30-year bond affects 30-year loans. The Fed funds rate affects adjustable rate mortgages.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,

Customer: replied 7 months ago.
since the election has the yield on the 10 year note gone up or down?

Dear Friend,

YES, The Yield has gone UP and the prices have declined.

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,

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