Dick LepreSenior loan officer, RPM Mortgage, San Francisco
The present state of Treasuries is a serious overreaction to QE and is a bet on the fact that we are about to have inflation well above recent levels. Producer Price Index was above expectation, but Consumer Price Index was well-contained. Markets are driven by more uncertainty than usual. It is hard to form an idea of what will happen with the economy and harder still to fathom what others will do. We are at a point where we have seen a very substantial increase in Treasury yields and mortgage rates driven by the notion that inflation is about to happen. This selloff has broken through all technical support levels, and what we will need is continued containment of inflation to knock yields down again.