Matt Grossman
speaker
182 appearances
3 recordings
1 series
first heard Apr 2022
last heard Jan 2025
Matt Grossman’s voice in public audio — every appearance, attributed to the second.
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Appearances
and everything will work the way you expected.
The complication comes from the fact that you can buy and sell tips anytime you want on the open market.
And if you wanted to sell your tips today that, say, you bought in January, you would have to accept a lower price from them.
The reason for that is that, as you probably know, the Fed has been raising interest rates quite a bit this year.
And that means that new tips that the government is selling now have a higher interest rate than tips that the government sold in January.
And so if you are someone who is trading tips from day to day, or if you've invested in a fund that is sending you a statement showing how much your bonds are worth every month,
you would probably see that it looks like you don't have as much money invested in your bonds as you did a year ago.
That's always a little bit tricky with bonds.
If you bought a TIPS a year ago or two years ago and your plan was to just hold it until it matures to protect you against inflation, that's still going to work exactly the way that you'd planned.
If instead you're someone who buys and sells bonds frequently or if you invest through a bond fund, you would probably see some red ink on your investing statement because again, bond prices have fallen this year.
The thing with bonds is that when bond prices fall, their yields rise.
They're offering you more compensation if you buy a bond today.
So that means if you have any spare funds to invest or if you're selling older bonds, if you use those to buy new bonds today, you're locking in a higher interest rate than you would have gotten a year ago.
Of course, prices could still fall farther, so it's not a guarantee of higher returns.
But at least the upside of falling prices is that the yields are rising.
If you were kind of right on the edge of being able to afford a home, it probably just got a lot tougher.
Thanks for having me.
Yeah, this is actually the fastest increase in mortgage rates over a three-month period that Freddie Mac has reported since the late 1980s.
So it's really been, as you say, a very rapid switch from a period when financing a home was very affordable to really a very different scenario now.
So mortgage rates have a lot of factors that go into them depending on who you are as a borrower and the property that you're using the mortgage to finance.
Showing 121–140 of 182 · page 7 of 10
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