From a client:
All of this debt ceiling nonsense has me a little freaked out that no matter what those fools in Washington wind up doing, the interest rates on mortgages are going to climb and I fear they will climb a lot by next springâ€¦
I know I’m not alone in having unsettled clients thanks to Congress’ incompetence.
The short answer is that no one has any idea what’s going to happen – the politicians seem more interested in brinkmanship and one-upping each other in an interminable game of us-v-them and not realizing that their (in)decisions have significant impacts on real people.Â
Not everyone agrees about the potential for a debt default, but economists and analysts across the board say the scenario would trigger sharp increases in one- and five-year Treasury yields, forcing mortgage rates to soar and break up a still-brittle housing recovery.
â€œDo I think the [U.S.] will default on [its] debt? No. But if they donâ€™t start making substantial progress soon we should look for interest rates to start to moving higher,â€ a Bankrate article reports Bob Walters, chief economist for Quicken Loans, as saying. â€œAnd that could happen before Aug. 2.â€
Hat tip: Varbuzz