That is a central planning answer
Posted on: December 13, 2022 at 13:44:07 CT
meatiger MU
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Why did mortgage rates go up? Simply because the Fed (central planners) forced it up, not because bank all of a sudden thought the risk was higher. Banks simply (as you said) took the rate (actually forced to take) the Fed set.
In a market situation, rates would likely revolve around a few things.
- Risk/return
- Alternative investments on a relative basis
- The general cost of borrowing money
What we have today is rates all revolve around a singular number put out by the fed, balanced by how much cash they pump out too.