what is the connection between short & long term interest rates and mortgage rates?

That is, how do Fed short-term interest rate increases affect the long-term interest rate market (e.g. treasuries & mortgages)?

4 Answers

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  • 1 decade ago
    Favorite Answer

    That mainly depends on the mortgage instrument. Adjustable rate loans are strongly tied to shorter rates like 6 month, 1 year or 5 year rates. A 30 year mortgage is closely tied to a 30 year bond rate

  • 1 decade ago

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  • 1 decade ago

    vote for answer above

  • Susan
    Lv 4
    4 years ago

    FINANCE CLASS@ KAPLAN EH?

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