What's New: I've updated the charts below through Friday's close. The S&P 500 is now up 10.94% for 2013 and a mere 0.70% below the all-time closing high of April 11th. The yield on the 10-year note closed Friday at 1.70%, its lowest closing of 2013.
The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.40%, down from its interim high of 3.63% in mid-March and nine basis points above its historic low of 3.31%, which dates from the third week in November of last year.
Here is a snapshot of selected yields and the 30-year fixed mortgage starting shortly before the Fed announced Operation Twist.
The 30-year fixed mortgage at the current level is a confirmation of a key aspect of the Fed's QE success, and the low yields have certainly reduced the pain of Uncle Sam's interest payments on Treasuries (although the yields are up from recent historic lows of last summer). But, as for loans to small businesses, the Fed strategy is a solution to a non-problem. Here's a snippet from the latest NFIB Small Business Economic Trends report:
''Credit demands remained weak in March. Twenty-nine (29) percent reported all credit needs met, and 49 percent explicitly said they did not want a loan (64 percent including those who did not answer the question, presumably uninterested in borrowing as well). Seven percent of owners surveyed reported that all their credit needs were not met, unchanged from February and 3 points above the record low.''
A Perspective on Yields Since 2007
The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007. The source for the yields is the Daily Treasury Yield Curve Rates from the US Department of the Treasury and the New York Fed's website for the FFR.Treasury Yields in Perspective