Can you smell it in the air? America is back! The last plank required to complete the foundation of my “America is Back Economic Recovery” model was for the 10-year yield to start trading in the range of 1.33% to 1.60%, and as of Feb. 16, this has happened. Higher treasury yields have pushed mortgage rates higher, but will higher rates cool the housing market?
We are currently administering three different effective and safe vaccines and are on the brink of reopening our economy. Added to this, the now high savings rate will likely go higher when the next stimulus checks are delivered.
Over the weekend, the Senate passed the 1.9 trillion disaster relief package, which will go back to the House of Representatives for a vote on Tuesday. We are looking at $1,400 checks being sent, six months of pandemic unemployment insurance, rental assistance, and many more disaster relief items.
Disposable personal income per capita, too, is at an all-time high and will also get another boost shortly. We have the backdrop for a healthy amount of consumer consumption.