Rate Watch Continues

Interest rates jumped this week from 4.75 to 5.25 within days. Despite the fed stating his intention to keep buying bonds and keep interest rates low, the bond market is responding to the knowledge that all of the planned stimulus packages and bailouts will have to be paid for with more and more bonds. The tremendous supply of new bonds will overwhelm demand resulting in lower prices and higher rates. Eventually, rates will head substantially higher.

Fear of future inflation has encouraged some of the selling in treasury bonds.
Only a renewed drop in the stock market may create another flight to the perceived safety of treasury bonds.
Any drop in rates to 5% or lower should be viewed as an opportunity to purchase or refinance.
Once this next flight to safety ends, I expect much higher rates.