10-year bond rates surged from 1.67% to 2.40% since early February
F fund prices will likely drop as bond rates rise due to inverse relationship
Potential F fund allocation decrease may be recommended next week
The big news last week was the rise in interest rates, especially on the 10 year bond. At the beginning of February the rate was 1.67%, and now it is 2.40%. Since mortgage rates usually follow this bond, now might be your last chance of getting refinancing at these low rates. Additionally, it should be noted that as interest rates rise, the price of the "F" Fixed Income fund will decrease as there is an inverse relationship between rates and bond prices. We'll see how things unravel this week, but next week may bring a decrease in the F fund allocation when we publish reallocations.
The big news last week was the rise in interest rates, especially on the 10 year bond. At the beginning of February the rate was 1.67%, and now it is 2.40%. Since mortgage rates usually follow this bond, now might be your last chance of getting refinancing at these low rates. Additionally, it should be noted that as interest rates rise, the price of the "F" Fixed Income fund will decrease as there is an inverse relationship between rates and bond prices. We'll see how things unravel this week, but next week may bring a decrease in the F fund allocation when we publish reallocations.