Re: The Trillion-dollar bet

[Doug Henwood <dhenwood@xxxxxxxxx>]

Daniel Davies wrote:

> I've done a bit of work on this in the UK context (where the variable rate
> mortgage is the standard) and as far as I can see, the percentage of new
> mortgages taken out at fixed versus floating rates forecasts the interest
> rate cycle pretty well.  The mass market of mortgage borrowers actually do
> at least as well as professional forecasters.

Last I looked at the US data, that used to be the case - except in
this cycle. The share of adjustables has risen even as interst rates
were at geenerational lows. Maybe the borrowers are right, though,
and rates will go to 0%.

Doug